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Malaysian Management Journal (MMJ) Vol. 3 No. 2 December 1999

Audit Committee Effectiveness Among Malaysian Listed Companies
Shamsul Nahar Abdullah & Ku Nor Izah Ku Ismail
School of Accountancy
Universiti Utara Malaysia

Abstract Ɩ Full Text
This study investigates further the previous paper by Shamsul Nahar and Al-Murisi (1997) by examining the interactive effects of the variables in that paper and introducing other variables associated with corporate governance and political costs. The present study postulated that percentage of external directors on audit committee interacted with the presence of an accountant on audit committee and with the number of years an audit committee in existence, respectively, to influence audit committee effectiveness. The study also posited that the interaction of the presence of an accountant on audit committee and the number of years an audit committee in existence positively and significantly influenced audit committee effectiveness. Addition. ally, the roles of leadership structure, audit committee chairman, and a firm's size on audit committee effectiveness were also investigated. Using a multiple regression from a sample consisting the Kuala Lumpur Stock Exchange listed companies, results showed that only a firm's size significantly influenced audit committee effectiveness in the predicted direction. Other variables, on the other hand, did not show any significant influence on audit committee effectiveness.
 

 
Practitioners' Perception Toward AIS Course Content Offered by Malaysian Universities
Noor Azizi Ismail, Akilah Abdullah & Hasnafi Kamardin
School of Accountancy
Universiti Utara Malaysia

Abstract Ɩ Full Text
The purpose of this study is to determine the degree of importance of each topic included in the Accounting Information Systems (A IS) course from the practitioners' point of views. This study was motivated by the increasing progress in information technology which proposed to re-examine the AIS course in order to meet the expectations and requirements of the profession. Three hundred and forty (340) questionnaires were sent to three different groups of companies namely public accounting firms, industry and commerce, and banking and finance. The response rate received is 22.35%. Respondents' opinions on the importance of AIS topics were measured using a five-point Liken scale. Results from the mean analysis showed that practitioners in Malaysia perceived all AIS topics listed as important. However, results from ANOVA analysis indicated that .five ( 5) topics were perceived significantly different among the three groups of practitioners. The five topics are general concept of accounting information systems, procurement cycle, application software, entity-relationship diagram and programming languages. Further analysis using Scheffe test indicated that procurement cycle and entity-relationship diagram topics differ significantly between Industry and Commerce and Banking and Finance. Public Accounting Finns and Industry and Commerce differ significantly in the application software topics. There were significant differences between all the three groups in programming languages.
 

 
Accounting Standards Compliance and Comparability of Measurement Practices: The Case of Malaysian General Insurers
Ku Nor Izah Ku Ismail & Shamsul Nahar Abdullah
School of Accountancy
Universiti Utara Malaysia

Abstract Ɩ Full Text
This study determines the extent of compliance level of Malaysian general insurers towards the requirements stipulated in MAS 3 (Malaysian Accounting Standard No.3: Accounting for General Insurance Business) and GPI (Guidelines on Accounting for Insurance Business, JPI/GPI 3), and subsequently determines the comparability of relevant measurement practices outlined in the Standards and Guidelines. Data from the annual reports of 35 insurers were gathered and 18 measurement practices were examined in the study. The Herfindahl index (known as H-index) was employed in measuring the comparability of measurement practices. Except for the accrual of dividends, results suggest that the compliance level of companies towards most of the other items were high. Nevertheless, results on comparability of measurement practices were rather mixed, having H-indices ranging from a low score of 0.47 to a perfect score of 1.
 

 
CAPM or APT? A Comparison of Two Asset Pricing Models for Malaysia
Cung Huck Khoon, Ahmadu Umaru Sanda & G.S. Gupta
 
Abstract Ɩ Full Text
This study uses monthly return data on 213 stocks listed on the main board of Kuala Lumpur Stock Exchange, Malaysia for the period September 1988 to June 1997 to compare two frequently cited asset pricing models: the capital asset pricing model, CAPM and the arbitrage pricing theory, APT. A comparison was performed along the lines of Chen (1983) and the results showed the APT to perform better than the CAP/ in explaining the variations in cross section of returns. The implication for investors is that the market index is but one of several sources of risk, which should be taken into account in any decision governing investment in the stock market.
 

 
On the Predictive Power of the Malaysian T Bills Term Spread in Predicting Real Economic Activity
Noor Azlan Ghazali Soo-Wah Low
Faculty of Business Management
Universiti Kebangsaan Malaysia
 
Abstract Ɩ Full Text
The ability of financial market interest rates to predict real economic activity has gained considerable attention of economics and financial researchers. In this regard, the term spread, i.e. the difference between long term and short term yield is argued to be an effective indicator to predict economic cycle. We investigate this proposition for the Malaysian economy using the T bills discount rates. Our results of both, single and multi-equation system of vector autoregression (VAR), support the case for Malaysia. Current T bills spread is shown to be a significant indicator for annual output growth for up to six months ahead. We also show that information conveyed by the term spread is unique and not of those implied by the monetary policy. Our results also indicate that, the power of term spread is limited for the near term prediction and over the long run money dominates spread in predicting output.
 

 
The Level of Efficiency in Handling Container Traffic at Penang Port: A Simulation Study
Abdul Razak Saleh & Razman Mat Tahar
School of Information Technology
Universiti Utara Malaysia

Abstract Ɩ Full Text
The six-month period (January 1995 - June 1995) data was extracted from "Pelabuhan Kontena" (PELKON) system and tested using SIMAN simulation process. Among the data available from the PELKON system are: arrival time of a ship, departure time of a ship, operation time for loading and unloading, total number of equipment used, number of containers unloaded, number of containers loaded, size of a ship, country of registration, last port of call, and next port of call. The arrival pattern of large ships (having a capacity to carry 507 or more containers) and small ships (having a capacity to carry less than 507 containers) follows Weibull distribution and Log-normal distribution, respectively. As a whole, there is no significant differences between the number of ships recorded by the PELKON data and the simulation process. A number of experimental studies such as acquiring less Port Crane, improve­ment of management service and integrated Prime Mover operation have been carried out to determine the effect on the container handling operations. The findings show that when one of the four port cranes did not work, the number of export containers decreased by 14.2% and 11.5% for import containers, If the services had been upgraded by 25%, the average time for unloading export containers could be shortened by 27.1% and the average time for loading import containers could be reduced by 7.9%. If the movement of prime movers had been integrated, the handling of export containers could be upgraded by 8.0% and 4.3% for import containers.
 
Keywords: Penang Port, containers, simulation, traffic, efficiency
 

 
Intentions to Reciprocate Vendor Gifts Amongst Malaysian Purchasing Executives
Syed Azizi Wafa, Muhamad Jantan & Jennifer Chow Kim Eng
School of Management
Universiti Sains Malaysia

Abstract Ɩ Full Text
Business gift giving is a universal standard of conduct for most business organizations and industries (Beltramini 1992; Brenner and Molander 1977). Organizations use gifts as means to show appreciation for past business and to influence the attitudes and behaviours of a select, prestigious group of buyers in anticipation of future business (Meredith and Fried, 1977). Vendor gifts may serve as effective means of influencing customers or prospects. This research studied the effect of types of gift (personal or corpo- rate gifts), cast of gift (expensive or inexpensive), and buyer-vendor relationship status (no relationship, moderate or strong) in relation to the buyers' (purchasing executives') feelings of indebtedness, per- ceived manipulations and intentions to reciprocate vendor's gifts. A total of 143 purchasing executives from manufacturing organizations in the Free Trade Zone of Penang were .sampled for the study. Similar to those of Dorch and Kelly( 1994), scenarios that incorporate the various combinations of the variables of interest were used to gauge reciprocating tendencies. The results show that the type of gift received, the extent to which the buyer experiences a sense of indebtedness, and the buyers' perceptions of the level of manipulation associated with the gift does significantly affect the buyers' intentions to recipro-cate. The research also indicates that gift type and cost with respect to buyer-vendor relationship status do not influence the level of perceived manipulation of the buyers.
 

Book Review
 
Title                      
Pencukaian Malaysia - Pentad biran, Penaksiran dan Pematuhan Cukai
 
Author
Jeyapalan Kasipillai & Mustafa Mohd. Hanefah
Universiti Putra Malaysia Press
 
Total Pages
249
 
ISBN
983-9319-40-X
 
Reviewer
Ho Juan Keng
Faculty of accounting
Universiti Teknologi Mara (UiTM), Malaysia