Training of Senior Government Officers

It was really an honour that the Association of Statutory Bodies (Persatuan Badan-Badan Berkanun), Malaysia has selected the Accounting Research Institute (ARI) to conduct statutory visits and training for its senior government officers as part of the association's Continuing Professional Development (CPD) program. After much discussion and deliberation, the visit cum training has been scheduled to take place in New Zealand during the period of 1st to 10th September 2013.  New Zealand has been chosen as the most appropriate destination for the group due to its high performance ranking in public sector administration globally.  In fact, New Zealand is the only country in the world that had reigned the top placing for the renowned Corruption Perception Index (CPI), sixteen times since its inception.  The 10-day program includes site visits/meetings with selected local authorities and top universities in New Zealand; participation in an international conference on Corporate Governance Management & Financial Criminology at University of Waikato and participants undertaking 13 interactive training modules.  Four ARI members - Associate Professor Dr Zuraidah Sanusi, Associate Professor Dr Jamaliah Said, Dr Nor Balkish Zakaria and Dr Ismarani have been entrusted by the Association to plan and coordinate the program.  For ARI and Universiti Teknologi MARA, the visit will include the signing of two Memorandum of Understanding (MOUs) with the University of Waikato dan University of Victoria.

Microcredit Business Transformation

As one of ARI HICoE research cluster projects, researchers from the Islamic microfinance group of the Accounting Research Institute has adopted a village in Sungai Pinang, Tanjong Karang for their "test bed". Through twenty women microcredit recipients of Amanah Ikhtiar Malaysia (AIM), a tailoring business was set up in the village.  To facilitate the development of the business, AIM has built a special-purpose workshop, equipped with sewing machines, cutting benches, display closets, an office and an exhibition room.  Initially, the business focuses on local clients.  Today, through ARI, the business is linked to a reputable hypermarket, Mydin Holding Berhad who acts both as a supplier and marketer for the group.  A memorandum of understanding (MOU) was signed in November 2012 between Universiti Teknologi MARA, Mydin Holding Berhad and AIM.   On a monthly basis, Mydin Holding supplies fabrics for the group to make the baju kurung, a national dress for Malaysia. Once completed, the group will arrange to send the dresses to Mydin Holding.  Through this business model, the group can focus on their tailoring business. ARI researchers help to train the business women on the aspect of financial management.  As business owners, it is indeed very crucial that they are trained to be financially literate.  A coordinator cum manager is appointed from among the group to handle financial matters.  

 A few post graduate students are working on this project and to gather relevant data to measure efficiency and effectiveness of the Islamic
Microfinance business model.  Today, a group of ARI researchers visited Tanjong Karang and to meet up with the ladies. Beside looking at business progress, the visit was also used to conduct interviews with the business owners and to get first-hand feedback of the business model.  Overall, the ladies are very happy with the business model.  In addition to the "contractual" business with Mydin Holding Berhad, they facilitate their income by taking tailoring jobs for corporate and individual clients. 

6th ICFC 2014 in Bangkok Thailand

Rangsit University, Thailand has agreed in principle to host the forthcoming 6th International Conference in Financial Criminology (ICFC 2014).

 Today, Prof Dr Normah Omar, Director of the Accounting Research Institute (ARI) and Prof Dr Rohana Othman, Head of the Asia Pacific Forensic Accounting Research Centre attended the preliminary meeting to discuss the theme, dates, prospective speakers as well as the use of possible conference management tool system for ICFC 2014.  To better organize the call for paper, the meeting agreed that Rangsit University will design a dedicated conference website as well as to place the "call for paper" for the conference on "Conference Alert", an online conference database system.  The meeting has also identified a few journal on "Forensic Accounting" and "Financial Criminology" for possible special issue on the conference.  Congratulations Rangsit University.  We look forward to attend the ICFC 2014 in Bangkok Thailand,

New FATF Recommendations 2012

The New 40 FATF Recommendations, therefore, set an international standard, which countries should implement through measures adapted to their particular circumstances. The FATF Recommendations set out the essential measures that countries should have in place to mitigate money laundering and terrorism financing.  Effectively, the New Recommendations aspire to do the following:

       identify the risks, and develop policies and domestic coordination;

       pursue money laundering, terrorist financing and the financing of proliferation;

       apply preventive measures for the financial sector and other designated sectors;

       establish powers and responsibilities for the competent authorities (e.g., investigative, 

          law enforcement and supervisory authorities) and other institutional measures;

       enhance the transparency and availability of beneficial ownership information of legal 

          persons and arrangements; and

       facilitate international cooperation.

Based on the previous Mutual Evaluation Report by APG in 2007, special attention need to be given on specific standards related to certain items namely: (i) Governance and Reporting of Non Profit Organisations (NPOs), (ii) Roles and Functions of Designated Non Financial Business and Professions (DNFBPs) and (iii) Cash Couriers by the financial service sectors

Mutual Evaluation for Malaysia

Come April 2014, Malaysia as a country will undergo a "Mutual Evaluation" Assessment by the Asia Pacific Group on Money Laundering (or fondly known as APG).  This time around, the assessment will be based on the "New 40 Recommendations", an international standard set by the Financial Action Task Force (FATF). The standard is to replace FATF's "40 Recommendations  + 9 Special Recommendations".  Basically the standard is categorised into seven groups:

1.  AML/CFT POLICIES AND COORDINATION covering:

•      Recommendation 1 (Assessing risks & applying a risk-based approach)
•      Recommendation 2 (National cooperation and coordination)

2.  MONEY LAUNDERING AND CONFISCATION covering:

•      Recommendation 3 (Money laundering offence)
•      Recommendation 4 (Confiscation and provisional measures)

3.  TERRORIST FINANCING AND FINANCING OF PROLIFERATION covering:

•     Recommendation 5 (Terrorist financing offence)
•     Recommendation 6 (Targeted financial sanctions related to terrorism & terrorist financing)
•     Recommendation 7 (Targeted financial sanctions related to proliferation)
•     Recommendation 8 (Non-profit organisations)

4.   PREVENTIVE MEASURES covering:

•    Recommendation 9 (Financial Institutions secrecy laws) 
•    Recommendation 10 (Customer due diligence)
•    Recommendation 11 (Record keeping)
•    Recommendation 12 (Politically exposed persons)
•    Recommendation 13 (Correspondent banking)
•    Recommendation 14 (Money or value transfer services)
•    Recommendation 15 (New technologies)
•    Recommendation 16 (Wire transfers)
•    Recommendation 17 (Reliance on third parties)
•    Recommendation 18 (Internal controls and foreign branches and subsidiaries)
•    Recommendation 19 (Higher-risk countries)
•    Recommendation 20 (Reporting of suspicious transactions)
•    Recommendation 21 (Tipping-off and confidentiality)
•    Recommendation 22 (DNFBPs: Customer due diligence)
•    Recommendation 23 (DNFBPs: Other measures)

5.   TRANSPARENCY AND BENEFICIAL OWNERSHIP covering:

•   Recommendation 24 (Transparency and beneficial ownership of legal persons)
•   Recommendation 25 (Transparency and beneficial ownership of legal arrangements)

 6.  POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES covering:

•  Recommendation 26 (Regulation and supervision of financial institutions)
•  Recommendation 27 (Powers of supervisors)
•  Recommendation 28 (Regulation and supervision of DNFBPs)
•  Recommendation 29 (Financial intelligence units)
•  Recommendation 30 (Responsibilities of law enforcement and investigative authorities)
•  Recommendation 31 (Powers of law enforcement and investigative authorities)
•  Recommendation 32 (Cash couriers)
•  Recommendation 33 (Statistics)
•  Recommendation 34 (Guidance and feedback)
•  Recommendation 35 (Sanctions)

7.   INTERNATIONAL COOPERATION covering:

•  Recommendation 36 (International instruments)
•  Recommendation 37 (Mutual legal assistance)
•  Recommendation 38 (Mutual legal assistance: freezing and confiscation)
•  Recommendation 39 (Extradition)
•  Recommendation 40 (Other forms of international cooperation)

SOURCE: The FATF Recommendations, February 2013

Benford Analysis as an Investigation Tool

Benford's Law Analysis is a tool that can help alert professionals such as accountants, auditors or fraud investigators when evaluating accounting data sets.  The results of the analysis may highlight possible occurrence of errors, potential fraud, manipulative biases, costly processing inefficiencies or other types of irregularities. Benford's Law, which is also called the First-Digit Law, refers to the frequency distribution of digits in many (but not all) real-life sources of data. In this distribution, the number 1 occurs as the leading digit about 30% of the time, while larger numbers occur in that position less frequently: 9 as the first digit less than 5% of the time. This distribution of first digits is the same as the widths of grid-lines on a logarithmic scale (i.e. a scale which has been mathematically developed). Benford's Law also concerns the expected distribution for digits beyond the first, which approach a uniform distribution.  The Benford analysis can be used to evaluate business transactions involving (but not limited to): Credit card transactions, Purchase orders, Loan data, Customer balances, Journal entries, Stock prices, Accounts payable transactions, Inventory prices and Customer refunds.  (Source: Mark Nigrini, May 1999; Journal of Accountancy)

External Grants for ARI HICoE

The Accounting Research Institute (ARI) congratulates its researchers from the Islamic Finance & Muamalat research cluster for securing various external grants for their projects.  Specifically, congratulations to the following members:
1.  Grant from Bank Negara Malaysia (Islamic Finance) RM60,000.00 for Prof Dr Rashidah Abdul Rahman (Head)  and her team for a project titled "Customers Perceptions and Behaviour towards Investment Accounts Concept in Islamic Banking"
2. Grant from Asian Institute of Finance (AIF) RM30,000.00 for Prof Dr Rashidah Abdul Rahman (Head) and her team for a project titled "Demand for Microcredit as a Determinant of Microfinance Outreach"
3. Grant for Amanah Ikhtiar Malaysia (AIM) RM36,000.00 for Prof Dr Rashidah Abdul Rahman (Head) and her team for a project titled "Portfolios of the Poor in Microfinance Projects".
4. Islamic Research and Training Institute (IRTI), Jeddah, Saudi Arabia USD10,000 for Associate Dr Abdul Halim Mohd Noor (Head) and his team for a project titled "Enhancing Zakat Distribution through Microfinance - Modelling Institutional Collaborative Efforts.

Congratulations all and well done

Enhancing Competency in Forensic Accounting

Researchers from the "Financial Criminology Research Cluster" of the Accounting Research Institute (ARI) completed their three-day training on the use of "Lavastorm Analytics and Lavastorm Fraud Manager", a newly acquired software for ARI's forensic laboratory.  Three principal researchers and their respective team members attended the event.  This powerful software allows the integration of data for effective fraud investigation.  The need to enhance researchers' competency in using latest technology for financial fraud detection is extremely crucial as it allows them  to teach and train others.  In particular, the software will be useful for the Master in Forensic Accounting and Financial Criminology students.  The knowledge can also be used to train financial fraud investigators.

Training Workshop for Lavastorm Analytics

The Accounting Research Institute (ARI) has recently purchased a software called Lavastorm Analytics  information system(LA).  Although LA is in itself represents an integrated data management system, ARI acquired the software to firstly manage its research data more effectively.  Secondly, LA is
specifically used to facilitate its researchers and clients to maximize their competency in data mining typically  for financial fraud detection purposes.  Essentially, LA is a new, agile way to analyze, optimize and control data and processes.  ARI organizes a three-day training workshop with the aim of learning more about the software and its potential use.  LA supplier sends its experts Michael and Aaron to facilitate the training workshop.   As in learning anything new, the learning curve  among participants was initially slow.  But later in the afternoon, participants were introduced with  tools that can be used to identify potential red flags in financial fraud data.  We learned the need to first and foremost to clean the data.  Very often, financial fraud investigators are challenged with voluminous data that must be sorted out before any investigation could take place.  Lavastorm is part of the facility and tool made available at the recently built Forensic Accounting and Polygraph Laboratory.

Bahasa Malaysia Version of CISM

The Malaysian Institute of Integrity (IIM) took the initiative to translate the "Corporate Integrity Assessment Questionnaire - CIAQ" into the Malay Language or Bahasa Malaysia (BM).  This is in view of the increasing need of using the BM version of the instrument among  public sector organisations.  The instrument has been professionally translated by the Malaysian Institute of Translation (ITN).  On the second day of IIM's 2-day workshop, participants were tasked to review the translation and were given the opportunity to further improve its contents.   Since it is a translation, participants were reminded that the contents should mirror the original's English version.  Two leading academics from Universiti Sains Malaysia (USM)  were tasked to lead the discussion.  Prof Dr Ishak and Prof Dr Hasnah were part of the Steering Committee that developed the CIAQ in 2010.  The Accounting Research Institute (ARI) sent the Head of the Corporate Integrity System Research Cluster, Associate Professor Dr Jamaliah and her team members to the event.  At the end of the second day, the group has unanimously endorsed the instrument.

CISM Stakeholders Outreach Program

The Malaysian Institute of Integrity (IIM) organizes its two-day outreach program, meeting and discussing with stakeholders on the issues of corporate integrity system Malaysia (CISM).  Recently, the Malaysian Government announced on the need of public sector organizations to set up their integrity unit or department.  In support of IIM's drive to promote corporate integrity at workplaces, the Accounting Research Institute (ARI) has established a research cluster called "Corporate Integrity System Research Cluster".  ARI researchers, together with a few other academics from Universiti Sains Malaysia, INCEIF and Nottingham University (Malaysia campus) helped to develop an instrument to assess corporate integrity at workplaces.  Known as "Corporate Integrity Assessment Questionnaire or CIAQ", public and private organisations in Malaysia can do their own assessment.  To ensure effectiveness, the questionnaire needs to be filled by between 30-50 respondents, comprising employees of various management levels.  Today, IIM organizes a two-day outreach program to explain the CIAQ instrument to various stakeholders of public and private organisations.  ARI director, Professor Dr Normah Omar and Dr Salleh Hassan from SIDC have been tasked to share the findings of two organisations who participated in the Corporate Integrity System assessment.  A total of fifty participants attended the event.

Publication Workshop by FC Research Cluster

A three day publication workshop entitled ‘Prioritizing Publication in Indexed Journals’ was held from 26^th – 28^th July 2013 in Selesa Beach Resort, Port Dickson, Negeri Sembilan. The workshop was intended for Financial Criminology-fraud indicators research cluster, which is headed by Associate Professor Dr Zuraidah  Mohd Sanusi (Deputy Director of ARI).  The workshop provides an avenue for researchers to discuss working papers in the field of financial criminology research, aiming to improve academic writing and making it ready for publication in indexed journals. This workshop achieved its purposes with attendees of 21 researchers and research assistants who have worked on more than ten papers to be published in SCOPUS/ERA indexed journals. The areas of studies includes fraud detection, internal control, audit quality, corporate governance, Shariah compliance companies, fraud incidents in banking, fraud risk in government agencies, government linked companies and earnings management.  

ARI’s staff also held their own workgroup to update research information for ARI’s database during the 3-day event. The database system developed by Dr Intan Salwani Mohamad (ARI’s fellow), has facilitated the requirement and expectations of MOHE towards ARI’s research grant achievement. Among the staff involved are Wan Mariati Wan Omar, Munirah Morad, Aziah Nasir, Hamidah Awal, Zamzarina Jaini and Farhana Alaei. They have collected information and evidence for all ARI activities up to June 2013. ARI needs to continue this high spirit to be more efficient despite of the challenge in the fasting month of Ramadhan.

Corporate Integrity Self Assessment Questionnaire

As one of the leading Government-Linked Companies (GLC), Tenaga Nasional Berhad (TNB) has taken initiative to self-assess the company's Corporate Integrity System.   TNB signed the Corporate Integrity Pledge (CIP) on 26th July 2011.  CIP is essentially a collaborative effort between Malaysian Institute of Integrity (IIM), Malaysian Anti-Corruption Commission (MACC), Performance Management Delivery Unit (PEMANDU) of the Prime Minister's Department.  In its pledge, TNB promises that it shall :

• not, through any of its employees, representatives or agents, commit any corruption offence under any law, such as the MACC Act 2009 or Penal Code;
• not conduct any business practices or activities that would require or encourage any of its employees, representatives or agents to commit such offences; and
• work together with its business partners, regulators and law enforcement agencies to create a business environment that is free from corruption,
• uphold the TNB’s Corporate Integrity Principles in Malaysia in the conduct of its business and in its interactions with its business partners and the Government; and
• shall take strict action against any party who tarnishes the integrity and the company’s image.

In line with the CIP, TNB has volunteered to participate in IIM's Corporate Integrity Self Assessment Questionnaire (CIAQ).  Through CIAQ, companies can assess their corporate integrity's current "benchmark level".  CIAQ comprises 12 dimensions supported by related 214 descriptors.   A 0% level implicates that "No ethics and integrity work has begun". A 25% level describes a "compliance mindset with symbolic action only. A 50% level signifies the "beginning of a programmatic thrust and the company is moving in a healthy direction".  At 75% level, a company is "seeing ethics and integrity systematically using a robust ethics and integrity approach".  Finally a company at 100%  level becomes a benchmark for its best practices in ethics and integrity.  The Accounting Research Institute (ARI) has been assigned the task of assessing those companies who have volunteered to participate in the CIAQ program.   Today, the researchers from ARI met up with officers from both IIM and TNB to present the preliminary findings of the CIAQ survey.

LRGS Experience

One of the most competitive research grant schemes in Malaysia is the "Long Term Research Grant Scheme or LRGS".   Basically, LRGS focuses on fundamental research that aims towards producing cutting edge ideas and solution to existing issues. Preferably, those interested to apply for LRGS must find a "niche" that is strategically aligned with the country's research and development agenda.  For 2013, the Ministry of Education has identified several research niche areas.  This includes topics such as : Global Warming, Infectious Diseases, Tropical Medicine, Energy and Water safety, Food Self-Sufficiency, Advanced Technology & Value Added, ICT, Halal Food,  Wakaf Financing and Youth Issues.  In developing their research proposals, researchers of a particular university need to include other researchers from at least two universities into their research team.  Researchers then prepare a concept paper outlining their research program.  Usually, each research program is supported by several integrated research projects.  The concept papers are reviewed by a panel of experts and those selected will be invited to prepare a more

comprehensive proposal.  The research teams are invited to present their proposals to a larger panel members.  At this point, only a few good proposals will be invited to prepare a full proposal.  Again, the full proposal will be further evaluated by the panels.  Only those whose proposals are approved at this level will be recommended for LRGS funding.  ARI Director, Professor Dr Normah Omar has been appointed as an assessor for both  the preliminary round as well as at the final stage of LRGS evaluation.  

BOS at the weekend

Prof Dr Normah Omar, Director of the Accounting Research Institute (ARI) has been invited to participate in a Blue Ocean Strategy (BOS) for the university.  In essence, a BOS focuses on some very interesting concepts such as (i) create uncontested market space; (ii) make competition irrelevant; (iii) create and capture new demand; (iv) create the value-cost trade off and (v) align the whole system of an organisation's activities in pursuit of differentiation and low cost.  Interestingly, a group of students representing the students Council (MPP) were also  invited to participate.  Some sixty value innovations identified in earlier workshop were deliberated.  Some of the value innovations proposed and discussed by/with the students include (i) U-Job, (ii) Not just affirmative action (iii)  Stakeholder satisfaction (iv) Flexible Break Hours and (v) Edutainment Library.  

Congratulations Dr Sharifah Norzehan

The Accounting Research Institute (ARI) congratulates one of our research associates, Dr Sharifah Norzehan Syed Yusof for winning the  Yayasan Nurul Yaqeen's Best Thesis Award for her PhD thesis with the central theme of the 'Islamic World View'.  In the grand final competition, this lecturer, from the Faculty of Accountancy UiTM Shah Alam, beat six other participants from the local institutions of higher learning. She received RM15,000, a trophy and certificate.  The prize was presented by the Deputy Prime Minister and Chairman of Yayasan Nurul Yaqeen, YAB Tan Sri Dato' Muhyiddin Mohd Yassin, on 4 July, at the Royale Bintang Damansara. Also present were the Deputy Prime Minister’s wife, YABhg Puan Sri Datin Norainee Abdul Rahman and YBhg Dato Dr Hj Ismail Hj Ibrahim.  Well done Dr Sharifah Norzehan Syed Yusof! (note: entry obtained from UiTM's website" 

Islamic Finance Newsletter

The Accounting Research Institute (ARI) thanks our post doctoral scholar Dr Bashir Mande for initiating the publication of ARI Islamic Finance Newsletter which will be made available online through ARI's website.  As such we invite scholars and practitioners to contribute papers in the area of Islamic Finance and Muamalat.  The maiden issue contains two research papers written by two scholars.  The first paper titled "Shariah Audit: A Strugle Towards Best Practices" is written by Associate Professor Dr Nawal Kasim.  The second paper which is written by Dr Bashir Mande is titled "Effectiveness of Shariah Committee in Islamic Microfinance Institution".  Professor Dr Rashidah Abdul Rahman who is heading the Islamic Microfinance research cluster gives an exclusive interview where she elaborates on the progress of her Islamic Microfinance project - a collaboration with Mydin Mohamad Holdings Berhad, Amanah Ikhtiar Malaysia (AIM), Majlis Agama Islam Selangor and ARI.  Congratulations all....

Uncovering Financial Shenanigans

Dr. Howard M. Schilit in his book titled Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports lists seven different shenanigans often committed by perpetrators.  Shenanigans are actions or omissions designed to hide or distort the real financial performance or financial condition of a company.  The seven shenanigans are namely: (1) Recording revenue too soon; (2) Recording bogus revenue; (3)  Boosting income with one time gains; (4) Shifting current expenses to later periods; (5)  Failing to disclose all liabilities; (6) Shifting current income to later periods and (7)  Shifting future expenses to current periods.  In trying to understand the concept of shenanigans, the AFC713 students were given financial statements as they are presented in the annual reports.  Then they are to identify transactions that may involved at least 1 financial shenanigan. Congratulations guy, everyone managed to identify at least 3 financial shenanigans.  

Teaching and Learning Innovations at University of Chulalongkorn Thailand

Chulalongkorn University, Thailand’s first institution of higher learning, opened in 1917 and is located in the centre of Bangkok city. The Faculty of Commerce and Accountancy was first established in 1938 &
contains five academic departments: Accountancy, Commerce, Statistics, Banking and Finance, and Marketing. There are currently 2,300 undergraduate students in the faculty and the Bachelor of Business Administration (BBA) International Program is the first undergraduate level programme that is taught entirely in English at Chulalongkorn.  The University has taken steps to innovate teaching and learning.  Premised on the belief that learning must go beyond "listening to lectures", faculties and students at the Chulalongkorn Business School (CBS) are exposed to "acting" as an effective mode of learning accounting and business-related knowledge.   The two types of learning laboratories at CBS are namely (i) a Theathre-like "black room" for students to act out "drama scenes"; and (ii) an online stockbroking room using live databases such as Bloomberg,  Standard & Poors and the local Stock Exchange of Thailand (SET).  ARI researchers were invited to visit the university and they explored  the various innovative teaching and learning tools at the university.

Rangsit University to host ICFC 2014

Whilst in Bangkok, ARI research team visited Rangsit University.  Universiti Teknologi MARA (UiTM) and Rangsit University signed a Memorandum of Understanding (MOU) in November 2012 to signify collaborations in research, publication, staff and student exchanges.  Infact, Rangsit University is the only private university in Thailand which has been assessed on education standard quality by the Office for National Education Standards and Quality Assessment (Public Organization) and rated "Very Good".  Currently, the university's curriculums are broadly categorized into five groups as follows;

1. Faculties of Medial and Health Sciences: College of Medicine, Faculty of Dentistry, Faculty of Pharmacy, Faculty of Medical Technology, Faculty of Nursing Science, Faculty of Physical Therapy, Faculty of Science, Faculty of Optology and Faculty of Oriental Medicine
2. Faculties of Engineering and Technology: College of Engineering, Faculty of Information Technology, Faculty of Biotechnology and Institution of Aviation
3. Faculties of Humanities and Social Sciences: College of Social Innovation, College of International, Institute of Diplomacy and International Studies, Faculty of Liberal Arts, Faculty of Communication Arts, Faculty of Law, Faculty of Education and Graduate School
4. Faculties of Art and Design: Conservatory of Music, Faculty of Architecture, Faculty of Arts and Design and Faculty of Digital Art
5. Faculties of Economics and Business Administration: College of Public Administration, Faculty of Business Administration, Faculty of Accounting, Faculty of Tourism and Hospitality Industry and Faculty of Economics

At Rangsit University, our group met up with the dean, faculty of accountancy, Prof Dr Nimnual Visedsun and Head of International program Dr Kathy Kanitsorn Terdpaopong.  In our discussions, it was agreed in principle that Rangsit University will host  the 6th International Conference on Financial Criminology (ICFC 2014) in Bangkok.  Detail discussions will be made between UiTM and Rangsit University by August 2014.  Currently, there is great interest among researchers to explore research topics in financial criminology.  It is therefore apt and appropriate that Rangsit University host the forthcoming conference in 2014.

 

Research Visit to Stock Exchange of Thailand

Despite the many challenges faced by the country's "Tom Yam Kung" Asian Financial Crisis in 1997, Thailand has risen strong to build a competitive capital market in the region.  Through our collaborator, Associate Professor Dr Wachira at the University of Chullalongkorn, our researchers were granted a visit to the Stock Exchange of Thailand (SET).  At SET, we were briefed on the development and progress of the Thailand stock market.  The Thai capital market has been increasingly recognized by international organizations along a number of dimensions, including being upgraded to be one of the 10 countries categorized in the Advanced Emerging Market group by FTSE, and ranked number three in Asia for Corporate Governance Watch 2012, which was a result of SET’s being focused on enhancing corporate governance among listed companies. Moreover, SET is ranked as one of the top markets in Southeast Asia, with as many as 23 large-sized securities that are highly liquid and with a combined market capitalization of more than USD 1 billion and daily trading volume of at least USD 10 million–characteristics that have made SET strong and attractive to international investors.  According to SET's 2012 Annual Report, among major development highlights in 2012, was SET's cooperation with business partners which has created new business opportunities, with the ASEAN Trading Link connecting the Thai stock market with those of Malaysia and Singapore, enabling local securities firms to more conveniently trade foreign stocks and serving as a solid foundation for a partnership among the exchanges in ASEAN that will fortify and draw global investors to ASEAN.  ARI wishes to thank SET for granting our members a visit.

ISGFC 2013 - Bangkok

The Accounting Research Institute (ARI) thanks the Chullalongkorn Business School (CBS) of the Chullalongkorn University, Thailand for hosting the International Seminar on Governance and Financial Criminology (ISGFC 2014).  Researchers from at least four countries, namely Malaysia, Indonesia, New Zealand and Thailand participated in the seminar.  In addition, there were also representatives from the Malaysian Institute of Integrity (IIM), Malaysian Accounting Research and Education Foundation (MAREF) and HELP College University who attended and participated in the plenary sessions of the seminar.  Papers presented have included topics on financial criminology, the governance and accountability of non-profit organisations (NPOs), Corporate Integrity, Corporate Governance, Anti Money Laundering and Anti Financing of Terrorism.   In a research meeting that follows, the research groups - ARI, CBS, University of Indonesia, HELP University College, IIM and MAREF agreed to organize an annual seminar related to the topics of corporate governance and financial criminology in the future

ARI-CCM Memorandum of Understanding

The Accounting Research Institute (ARI) and Companies Commission of Malaysia (CCM) signed a Memorandum of Understanding (MOU) today.  The MOU allows a collaborative research on non-profit organisations (NPO) governance.  Globally, especially in developed countries such as USA and United Kingdom, NPO has been considered as a "third sector".  Generally, NPO plays a key role in a country's development through social contributions, such as human rights, health, education and other critical social needs.  The MOU was signed by SSM Chief Executive Officer Mohd Naim Darwish and UiTM Vice Chancellor Tan Sri Dato' Sri Professor Ir Dr Sahol Hamid Abu Bakar.  The event was witnessed by Deputy Domestic Trade and Consumer Affairs Minister Datuk Ahmad Bashah Md Hanipah.

ICGMF 2013 in New Zealand

In its effort to enhance international collaborations, the Accounting Research Institute (ARI) will be co-organizing an international conference in New Zealand.  Themed "Good Governance, Ethics and Integrity", the International Conference on Governance, Management & Financial Criminology (ICGMF 2013) will be hosted by the Waikato Management School, University of Waikato, New Zealand.  ICGMF 2013 will be co-organized with ARI, Faculty of Commerce & Accountancy, Chulalongkorn University Thailand and the Institute of Public Enterprise, India.  Selected papers will be considered for review for possible publication in indexed journals.  A special key note paper on the governance of public sector will be featured on the first day of the conference.  Those interested to participate may contact the secretariate at: icgmf@gmail.com

 

Islamic Microfinancing: Baju Kurung Handover Ceremony

One collaborative research undertaken by ARI researchers under its niche Islamic Financial Criminology is related to Islamic Microfinance.  The project which is headed by Professor Dr Rashidah Abdul Rahman examines the current gap in microfinance model.  Generally, entrepreneurs indicated their wish to have a supplier to complete the supply chain model of the microfinance-based business.  As such, ARI has sought the cooperation of Mydin Holdings Berhad to facilitate these entrepreneurs.  The first phase microfinance research project has also involved Amanah Ikhtiar Malaysia (AIM), financier of the microfinance credit.  Through Sahabat (AIM's entrepreneur network), entrepreneurs undertook a baju kurung tailoring project with Mydin. In conjunction with the collaborative action research project between ARI, AIM, MAIS Zakat Selangor Berhad (MZSB), and Mydin Mohamed Holdings Bhd, a Baju Kurung Handover Ceremony has been held at Mydin Training Center this morning. During the ceremony, the first batch of 182 baju kurungs sewn by a group of AIM sahabats from Tanjung Karang, have been  handed over by the Managing Director of AIM, Datuk Zabidah Ismail to the Executive Director of Mydin, Mr. Salim Ali Mydin. In her opening speech, Datuk Zabidah personally thanks everyone involve in this project especially ARI and Mydin for providing wider social networks and support structure for AIM sahabats to involve in economic activities, thus improving their household income.    

Welcome New Cohort of AFC713 Class

The new cohort of the Master in Forensic Accounting and Financial Criminology program at Universiti Teknologi MARA is currently undertaking one of the core courses of the program: Money Laundering and Financial Criminology (AFC713).  Basically the course is divided into two components - money laundering and financial criminology.  The money laundering aspect of the course reviews the Anti-Money Laundering and Anti Terrorism Financing Act (AMLATFA) 2001, examines mutual evaluation country reports of the Financial Action Task Force (FATF) and its regional associates.  In the case of Malaysia, the FATF's regional associate is the Asia Pacific Group on Money Laundering (APG).  In monitoring the anti money laundering and counter financing of terrorism (AML.CFT) regime, member countries (of either FATF or APG) are required to comply to the 40 + 9 recommendations (now reviewed as 40 new recommendations). Guest speakers (from the industry, regulators or enforcement agencies) are also invited to give talks to the class.  Meanwhile, the financial criminology aspect of the course identifies financial fraud cases, examines fraud risk indicators, develops mitigating tools and proposes investigation techniques.  Today, the students presented their cases in classes. Whilst three groups presented global and local money laundering cases, another three groups examined the levels of country compliance on one group of reporting institution known as the designated non-financial business and profession (DNFBPs) of thirty countries globally.

Visit from Universitas Trunojoyo Madura, Indonesia

The Accounting Research Institute (ARI) thanks delegates from Universitas Trunojoyo Madura, Indonesia who visited our Shah Alam campus recently.  The four-member delegations were headed by the Dean of the Faculty of Economy, Pro. Dr. M. Nizarul Alim.  Discussions focused mainly on potential research collaboration in the areas of Islamic Finance and Wakaf Management.  To signify the visit, a letter of intent was signed by both Dean Nizarul and Professor Dr Normah Omar, director of ARI.  As such, researchers from ARI's  Islamic Finance & Wakaf Cluster will be preparing a research proposal together with researchers from Universitas Trunojaya.  Indeed, in Indonesia, there are a lot of universities that have been successfully set up through Wakaf financing and they would be great case  studies for the research project. An MOU will soon be drafted to formalise the collaboration.

IFCTF 2013

The annual International Financial Criminology and Terrorism Financing Conference 2013 will be back with more interesting stuff.  This is in view of the fact that Malaysia will be undergoing the Mutual Evaluation (ME) assessment of the Asia Pacific Group on Money Laundering (APG) scheduled for April 2014.  As such is it expected that the conference will provide interesting and practical topics that could enhance participants' knowledge and competency in the AML/CFT area.  Again, for the third time, the Accounting Research Institute (ARI) is greatly honoured to be invited to be part of the organizing committee.  As per last year, the main organizers of IFCTF 2013 will be the Compliance Officer Networking Group (CONG) and the Asian Institute of Finance (AIF).  Today, two ARI researchers - ARI Director Prof Dr Normah and Fellow AP Dr Jamaliah attended the preliminary meeting of the IFCTF 2013 Committee.  Dates, venue and theme of the conference will be confirmed by the next committee meeting in June 2013.  We look forward to another very interesting conference...

ARI-CCM Collaboration

Universiti Teknologi MARA (UiTM) and Companies Commission of Malaysia (CCM) will formalise their collaboration soon.  A Memorandum of Understanding (MoU) and a Non-Disclosure Agreement (NDA) are scheduled to be signed by both parties on 18th June 2013 at UiTM.  In principle, CCM has agreed to engage the Accounting Research Institute (ARI) to undertake a research project on the Governance of Non-Profit Organisations (NPO) in Malaysia.  The preliminary focus of this project will be on those NPOs that are currently registered with CCM.  Globally, NPO is a huge sector.  In fact, in many developed countries such as the US and UK, the NPO sector has been recognised as a "third sector" after the "public sector" and the "private sector".  If strategically governed, NPOs have the potential to contribute significantly to nation building.  Today, three officers from CCM came to ARI office to finalise the documents and to discuss the signing event.

ICFC 2013 - Day 2

Day 2:

The second day of the conference started with two more plenary sessions in the morning.  Plenary Session 6 titled "Forensic Investigative Techniques and Procedures" was moderated by Professor Dr David Chaikin from University of Sydney, Australia. Meanwhile, the two invited panelists comprised Mr Awang Armadajaya, Deputy Public Prosecutor, Attorney General Chambers and Mr Sukdev Singh, Director of Forensic Investigations, KPMG Malaysia.  Essentially, the speakers highlighted on two very important points: Forensic investigation needs to be properly documented and it must be evidence-based.  Plenary 7 titled "Accounting & Legal Issues From Australian Perspectives" saw two professors from Australia sharing their views.  Prof David Chaikin of the University of Sydney Business School was a practising lawyer specialising in multi-jurisdictional investigations, transnational commercial and criminal litigation, as well as offshore corporate and banking law. He has worked as a consultant to the United Nations, the OECD-based Financial Action Task Force and the Asia/Pacific Group on Money Laundering.  The second speaker, Professor  Dr Paul Barnes was previously Professor of Finance and Fraud Risk Management at Nottingham Business School in the UK. He is a Chartered Certified Accountant with degrees in history, management science, and a Ph.D. in economics.  To date, he has written a number of books and published many academic papers in a wide variety of journals in the UK, Australia and the USA. One of his books Stock Market Efficiency, Insider Dealing and Market Abuse was recently published in Australia.  Following the two plenary sessions were concurrent paper presentations by researchers.  the papers have been effectively divided into four separate categories: "Fraud & Corruption", "Taxation & Zakat", "forensic accounting" and Governance & Ethical issues. 

More than 30 research papers that were mainly in the areas of financial criminology and Islamic finance were  presented. Most of these papers would be accordingly reviewed and hopefully published in a special issue of the Malaysian Accounting Review journal.  Finally, ICFC 2013 came to a closure with a brief concluding remarks by Prof Dr Normah Omar, director of the Accounting Research Institute (ARI).  Till we meet again in the 6th International Conference on Financial Criminology 2014 .......

 

 

 

International Conference on Financial Criminology (ICFC) 2013

Day 1:

The opening ceremony of the 5th International Conference on Financial Criminology was successfully officiated by the Vice Chancellor of Universiti Teknologi MARA, Dato' Sri Prof. Ir Dr Sahol Hamid Abu Bakar.  Themed Global Trends in Financial Crimes in the New Economies, the two-day ICFC 2013 conference has attracted international participants from 11 countries, namely -Thailand, Singapore, Nigeria, Saudi Arabia, Republic of Iran, United Kingdom, Australia, India, Indonesia, Hong Kong and New Zealand.  For local participants, apart from academics from public and private universities, there are also practitioners  from the Accountants General Office, Auditor General Office, Dewan Bandaraya Kuala Lumpur (DBKL), Companies Commission of Malaysia (CCM), Securities Commission (SC), banks, local authorities, Registrar of Societies (ROS), Malaysian Institute of Corporate Governance (MICG), Cooperative Commission of Malaysia, Ministry of Finance, Association of Fraud Examiners (ACFE), Association of Anti-Money Laundering Specialists (ACAMS), Audit firms (including Big Four firms), Malaysian Anti Corruption Commission (MACC), Inland Revenue Board Malaysia (IRBM), Royal Malaysia Customs, Royal Malaysia Police, Labuan Offshore and the Attorney General Chambers (AGC). 

The day started with a welcome speech by the vice chancellor.  This was then followed by the keynote speech "Economic Crimes and Governance" by Tan Sri Dato' Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas which was read by his representative Mr Ahmad Shahab Haji Din from MICG.  It has been emphasized in the keynote speech that there is strong correlation between the occurence of economic crimes with the level of governance being enforced in any organisation.  In a nutshell, effective governance requires more than mere compliance of rules and procedures.  The keynote address set the direction of the three plenary sessions afterwards.  The first plenary session which was moderated by Tuan Awang Armadajaya (AGC) focused on the topic "The Evolution of Forensic Accounting in the Asia Pacific Region: What Does the Future Hold?".  Two invited speakers to discuss the topic were namely (i) Mr Chris Fordham, Managing Partner, Fraud Investigation & Dispute Services Asia Pacific, Ernst & Young Advisory Services Ltd (UK)  and (ii) Mr Petrus Gimbad, Member of the Board of Directors, Sabah Development Bank.  The discussions highlighted the fact that globally, financial crimes which are dubbed as "crimes of the new millinieum" are on the rise.  Whilst enforcement agencies and regulators are enhancing their competency level in this new knowledge, perpetrators are finding ways to hide "evidences" and to destroy audit trail.  As such, effective fraud prevention programs must integrate multiple investigation techniques with the latest technologies and skills.

The second plenary session titled "Combating Tax Evasion and Money Laundering" was moderated by Professor Dr Normah Omar from ARI.  To discuss the topic, ICFC 2013 has invited two speakers namely (i) The Chief Executive Officer of the Inland Revenue Board of Malaysia, Tan Sri Dr Mohd Shukor Haji Mahfar and Mr Aaron Lau, an accredited trainer for the Association of Certified Anti-Money Laundering Specialists (ACAMS) certification program.  Since 2010, the Anti Money Laundering and Anti Terrorism Financing Act (AMLATFA 2001) has been amended to include Tax Evasion as one of the predicate offences under this jurisdiction.  As such, tax evasion constitutes a "proceed from an ill-gotten gain activity".  Tan Sri Dr Shukor further proposed for the setting up of a "task force" from among various regulatory and enforcement agencies when investigating money laundering and tax evasion cases. 

Professor Dr Syed Noh Syed Ahmad, moderated the third plenary session on "Economic Crimes & their Impact on the Socio Economic Development".  The two speakers for this session were (i) Dato' Akbar Satar, President of Transparency International Malaysia and (ii) Tan Sri Datuk Seri Dr Sulaiman Mahbob, Chairman, Malaysian Institute of Economic Research (MIER).  Discussions centred on the "causes of economic crimes" and the "costs of Crimes".  Globally, economic crimes have escalated and there is an urgent need for governments and countries to review  possible "loopholes" in public and private policies that might give rise to financial crimes. 

After the lunch break, participants were presented with two more "heated" plenary sessions.  The fourth plenary discussion titled "Prosecuting Economic Crimes" were presented by Supt Lee Ewe Kiang from the Royal Malaysia Police (RMP), Tuan Syed of AGC and Ms Shanti Geoffrey, from the Prosecution and Enforcement Division of the Securities Commission Malaysia.  The three speakers gave relevant statistics to implicate the seriousness of the subject matter.  It was concluded that the fight against economic crimes should be shouldered by everyone.  Though it is almost impossible to totally eradicate financial crime, everyone can play a role to prevent fraud from happening. 

The final plenary session for the day was deliberated by three more renowned speakers: Dato' Sri Abu Kassim Mohamed, Chief Commissioner of MACC; Mr Alex Tan of PwC Malaysia and Mr Nizam Ali of the Malaysian Institute of Integrity (IIM).  Basically, the speakers discussed on the topic "The Global Challenges of Economic and Financial Crimes and How They Affect You and I".  Participants were given a "small survey" to find out if they have given any kind of "bribes" within the last 12 months.  The "result" from a total of 74 sample participants  implicate that only a small number of four respondents (5%) have admitted bribery.  Ironically, "Corruption Perceived Indexed" stood at a much higher rate, hence the issue of "reality vs perception" needs to be  specifically addressed.  Instead of subjecting themselves to "perceptional verdict", countries should develop their own indices.  Mr Nizam of IIM spoke of the Corporate Integrity System that had been initiatited by his institute as a possible instrument to measure and benchmark integrity at work places.  Throughout all five plenary sessions on the first day, participants were given the opportunity to interact with the invited speakers.  The face-to-face interactions have produced some very interesting suggestions and recommendations.