Tools to Detect Financial Fraud

Students from the Master in Forensic Accounting and Financial Criminology program who are currently taking the course on Money Laundering and Financial Criminology made their group presentations today. The students presented their selected tools which included among others: Financial Ratios (FR), Financial Statement Analysis (FSA), Beneish Model, Altman Z-Scores, Benford Model, Networth Analysis, Social Network Analysis (SNA), Neural Network Analysis (NNA), Document Analyzer and Data Mining Model. In their presentations, they had to demonstrate how each tool is being used in their financial fraud investigation cases. Some techniques such as FR and FSA are conventional analytical tools and they are still relevant and widely used today.
Meanwhile, tools such as Benford Model and Data Mining could be easily integrated with available spreadsheets like microsoft excel and access. The utilization of graphic interfaces to estimate frauds is widely used in tools such as Social Network Analysis, wavelet and Neural Network Analysis. For cases involving tax fraud, the networth analysis is still useful, as the "burden of proof" remains with the suspected fraudsters.

Happy Deepavali Message

The Accounting Research Institute sends a Happy Deepavali wish to all our Hindu friends who are celebrating their big day today. Special best wishes to our members: Associate Professor Dr Nagaretram Thirumanickam, Associate Professor Dr Indra Devi Manoharan, Dr Ganisen, Ms Usha Rani and Ms Chantradevi.

New Researchable Topics

It was interesting to review some of the new researchable topics being presented by some of our researchers who are pursuing their higher degree programs. These topics are in line with the current needs of the industry, profession and academia:
(1) Carbon Accounting and Green Taxation
(2) Fair Value Accounting of Financial Statements
(3) Valuation Issue of Fair Value Accounting
(4) The cost of anti-money laundering to financial institutions
(5) The Role and Effectiveness of financial intelligence units in promoting AML/CFT measures
(6) The role and function of the Auditor General Office of the Government (AOG) in mitigating financial shenanigans
(7) The use of non-profit organizations as conduit to money laundering and terrorism financing
(8) Developing code of governance and financial reporting framework for charity organisations

Thank You Prof Malcolm Smith

The Accounting Research Institute (ARI) and the Faculty of Accountancy wish to thank Prof Malcolm Smith, a visiting professor to Universiti Teknologi MARA for his recent visit. Professor Smith is currently attached with the School of Accounting, Finance and Economics of Edith Cowan University, Western Australia. His current research interests include management control system, corporate governance, whistleblowing and financial criminology. Prof Smith-Universiti Teknologi MARA (UiTM)collaboration started as far back as 2003 when UiTM and University of South Australia (Prof Smith was then with UniSA) offered a joint Master in Accounting Information System for our young lecturers. Prof Smith has written and published a lot of articles on these topics in international refereed journals. He has also agreed to participate in ARI's forthcoming collaborative research projects on AML/CFT and NPO Governance Framework. Thank you Prof Smith for sharing with us your new book Research Methods in Accounting. Your gift will certainly be shared with other ARI researchers.

Financial Reporting Framework for NPOs

Researchers from the Accounting Research Institute (ARI) and senior officers from the Registrar of Societies (ROS)met yesterday to discuss on the development of a suitable financial reporting framework for non profit organisations that are registered with the ROS. ROS director-general Datuk Abdul Rahman Othman, who was heading the delegation from ROS indicated in the meeting that the pilot project using the new reporting framework will be launched by its Selangor branch in March 2012. Currently, there are more than 90000 NPOs who are registered with ROS. In general, the main classifications of ROS's NPOs are in the category of namely: Religous, Education, Health, Culture, IT, Youth and politic. In Selangor alone, there's more than 9000 registered members. The new financial reporting framework will be digital and system-based. NPOs can submit online, relevant information that are required under the Society Act and ROS, in turn can produce customised NPO reports for different stakeholders. The ARI team comprised of researchers from different research clusters namely: Financial Reporting Research Centre (FRRC), Corporate Governance Research Centre (CGRC) and the Accounting Information System research group.

FRS for Public Universities

The Accounting Research Institute has been appointed as consultant and trainer by the Bursary Secretariat of public universities to train staff on Financial Reporting Standards (FRS).
Effective 1st January 2012, all public universities will start using the FRS for their financial reports. The convergence from cash to accrual basis is part of the government trasformation plan in driving efficiency and productivity in the public sector. Today, ARI director, Prof Dr Normah Omar and ARI's Head of the Financial Reporting Research Centre (FRRC)Associate Professor Dr Roshayani Arshad made a presentation to the secretariat on the proposed FRS training module which has been scheduled to be held in December 2011.

Potential Collaboration with UTAS

The Accounting Research Institute (ARI) and the Faculty of Accountancy welcome Professor Gary O'Donovan, Dean Faculty of Business, University of Tasmania, Australia (UTAS) to Universiti Teknologi MARA (UiTM). Prof O'Donovan who was stopping by Kuala Lumpur, paid us a brief visit at the Shah Alam Campus. In our discussions it was concluded that there's a lot of areas for possible collaboration between UiTM and UTAS. For ARI in particular, there's room for joint research collaboration in the areas of management accounting and financial criminology. In addition, there's also prospects for joint PhD supervision and joint publication. A letter of Intent may be signed in November 2011.

Professor Extraordinaire

The Research Institute of Natural Products for Drug Discovery(RIND)from Universiti Teknologi MARA organised a half-day Inaugural Lecture by Professor Dr Atta-Ur-Rahman. Professor Atta-Ur-Rahman from the International Center for Chemical and Biological Sciences, University of Karachi, Pakistan is indeed an amazingly extraordinary person.He obtained his PhD in organic chemistry from Cambridge University. To date, he has 844 publications on various fields of organic chemistry, including 664 research publications, 18 patents, 103 books and 59 chapters in books published largely by major US and European presses. Professionally, Prof Atta-ur-Rahman is the first scientist from the Muslim world to have won the prestigous UNISCO Science Prize in 1999. He was also elected as Fellow of Royal Society (London). In his lecture today, Prof Atta-Ur-Rahman shared his recent research findings related to issues relevant to socio-economic development of the OIC nations through higher education and science & technology. He is a real role model for the generations of young Muslim scholars, a scientist par excellence and a leader of unparallel commitment and vision...

A Farewell Do...

Researcher couple Dr Rashid Ameer and Dr Radiah Othman will be migrating to New Zealand in November 2011.
As a team player and research fellows at the Accounting Research Institute (ARI), they both have contributed tremendously in research, publications and other administrative duties. Today, ARI together with other fellow members and staff organized a farewell do for both of them. Despite them being away, they will continue to serve ARI as visiting research fellows and we hope to enhance international collaboration with universities and research centres in New Zealand. We wish you all the best in future endevours. ...

Research on Islamic Home Financing

Congratulations Prof Dr Rohana and her team for successfully organizing a research discussion session with several industry players. The event which was held at the Hilton Hotel, Petaling Jaya was attended by researchers, bankers and lawyers. Four panelists who participated in the discussions were namely (i) Mr Rahizam Ibrahim (BNM)with the topic "Overview on BNM Shariah Governance Framework and its Application Among IFIs", (ii) Mr Mohd Yusof Abdul Rahman (EONCAP Islamic Bank) "House Financing Practice - Bithaman Ajil (BBA)", (iii) Mr Mohd Nazri (BIMB), "Risk Management of the Islamic Finance" and (iv) Dr Hj Zaharuddin Abd Rahman (UIAM), "The Relevance of Fiqh Muamalat in Islamic Banking Operation".

Budget 2012 - Promoting Seven Focus Areas

Based on the Malaysian Budget 2012 tabled by the finance minister Dato' Seri Najib Razak in parliament today, the government will have seven focus areas in 2012, two of which are a more targeted subsidy programme for low- and middle-income groups and more incentives for new investments. Successful implementation of these seven focus areas is expected to yield an expansion of 5 to 6 per cent growth to the Malaysian economy in 2012. In its economic report for 2011/2012, the seven focus areas are namely (i) measures to reduce the impact of inflation; (ii) enhance the well-being of the rak-yat; (iii) accelerate rural transformation; (iv) reinvigorate investment activities, (v) innovate Malaysia; (vi) develop human capital and (vii)improve public services delivery. For research institute such as ARI, Budget 2012 provides a lot of fresh opportunity for us to embark on new research and training projects with our collaborative partners.