Accounting changes reporting in Malaysian corporations
Changes in accounting and financial reporting are inevitable (Hall & Aldridge, 2007). Hall and Aldridge (2007) stated that this happens because in preparing periodic financial statements, companies must take estimates and judgements to allocate costs and revenues. Accounting disclosure e...
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| Format: | Book Section |
| Language: | English |
| Published: |
Penerbit UTM Press
2009
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| Subjects: | |
| Online Access: | http://eprints.utm.my/14438/ http://eprints.utm.my/14438/1/Mohd.NoorAzli2009_AccountingChangesReportinginMalaysianCorporations.pdf |
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| Summary: | Changes in accounting and financial reporting are inevitable (Hall &
Aldridge, 2007). Hall and Aldridge (2007) stated that this happens
because in preparing periodic financial statements, companies
must take estimates and judgements to allocate costs and revenues.
Accounting disclosure especially notification of information on
a business unit has become a widely studied area in the West
(Benston, 1973). The issue of accounting change has been subject to
considerable research attention during the 1990s. The main interest
has been directed at exploring changes in: accounting systems,
accounting techniques, the accountancy profession, and the role of
an accountant (for general references to such work, see Chua (1995)
and Bhimani (1996)). In Malaysia, the accounting disclosure has yet
to be studied vigorously (Hamzah, 1983). This however, does not
mean that this issue is unimportant, and lately a lot of researchers
have been researching on the report of extraordinary item (Shamsul &
Nor Izah, 2000), cash flow statement (Ng, 1999), empirical studies on
accounting and disclosure (Ng, 1998), uses of financial report (Azhar,
1999) and information that are needed by consumer and voluntary
disclosures by the Kuala Lumpur Stock Exchange (KLSE), currently
name as Bursa Malaysia listed companies (Tan et al., 1990).
Disclosure is a means whereby information regarding a
business unit can be conveyed. Based on this information, interested
parties and potential investors will be informed of the strengths and
weaknesses of a particular business unit, in terms of profits made, and/or whether the management of the business unit act in a manner
which can be of benefit to the potential investors (Hamzah, 1983).
Consistency in the accounting policy as stated in the
Malaysian Accounting Standards Board (MASB) 1 is one of the
accounting doctrine, which is the basis of financial planning and
presentation. Users should be able to compare and differentiate every
company financial statement for a period of time to identify financial
position flow, performance, and cash flow. For that matter, the same
accounting policy will be used for an accounting period. Changes
in the accounting policy need to be done if directed by the law or the
MASB, or if the change will give a more accurate result for presenting
a situation or transaction in a company’s financial statement (MASB
3). This study is a preliminary study on the accounting disclosure
by listed companies on the main board of the KLSE based on their
annual financial report.
The remainder of this paper is structured as follows. The next
section provides an overview of accounting change. Section three
discusses research methodology, followed by research findings. The
paper ends with a conclusion and directions for future research. |
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