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The influence of corporate characteristics on the extent of compliance with MASB Standards among Malaysian listed companies


Abdul Rahman, Azhar and Ku Ismail, Ku Nor Izah and Wan Hussin, Wan Nordin (2010) The influence of corporate characteristics on the extent of compliance with MASB Standards among Malaysian listed companies. In: Malaysia-Indonesia International Conference In Economics, Management and Accounting 2010 (MIICEMA 2010) , Bangi, 25-26 November 2010. (Unpublished)

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Abstract

This paper contributes to our understanding of compliance with mandatory accounting standards. Specifically, we examine the efficacy of agency related mechanisms on the degree of disclosure compliance with the Malaysian Accounting Standards Board(MASB) accounting standards. Using data drawn from a sample of 170 Malaysian companies listed on the Kuala Lumpur Stock Exchange (KLSE) in 2004, we show that although overall disclosure compliance is high (85.2% of the items of information being disclosed), companies do not fully comply with MASB 10 (Accounting for leases),MASB 11 (Consolidated financial statements and investments in subsidiaries), MASB 12(Investments in Associates), MASB 15 (Property, plant and equipment), MASB 20(Provisions, contingent liabilities and contingent assets), MASB 24 (financial instruments), MASB 27(Borrowing costs) and MASB 29 (Employee benefits). We employ an ordinary least square (OLS) regression model to establish whether selected company-specific and corporate govemance characteristics (proxying for agency-related mechanisms) are related to the degree of disclosure compliance. Our results indicate that only leverage is positively associated with the degree of compliance. The other variables consisting of board independence, audit committee independence, the existence of qualified accountant in the audit committee, CEO duality, the extent of outside blockholders' ownership, firm size and profitability do not show any significant relationship with degree of compliance. These results have important implications for policy because they suggest that whilst agency-related mechanisms may motivate compliance with mandatory standards, full compliance may be unattainable without regulations.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Jointly organized by National University of Malaysia, Universitas Syiah Kuala Banda Aceh, Universitas Bengkulu, Universitas Muhammadiyah Surakarta, Universitas Pertanian Bogor
Uncontrolled Keywords: Compliance, MASB, accounting standards, Disclosure level, Malaysia, Kuala Lumpur Stock Exchange.
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User: Prof. Dr. Ku Nor Izah Ku Ismail
Date Deposited: 06 Mar 2011 03:04
Last Modified: 24 Apr 2016 02:31
URI: http://repo.uum.edu.my/id/eprint/2639

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