Empowering Middle Class Financial Freedom

Professor Dr Normah Omar was today invited to give a professional talk entitled "Empowering Middle Class To Achieve Financial Freedom" to officers from the Retirement Advisory Services (RAS) unit of Employees Provident Fund (EPF) at  EPF Learning Centre in Bangi.  RAS is part of EPF's long-term plans to enhance service delivery that aims to help members achieve a sustainable retirement, for those nearing retirement or the newly retired.  Members will be given guidelines and options to help them manage and grow their EPF savings.  

RAS also has awareness and education programmes on basic financial and retirement planning.  Participants were exposed to important concepts such as active and passive income.  Budget 2016 defines Malaysia’s middle class (also known as M40) as those 40% Malaysian whose household monthly income ranges between  RM3.860 to RM8,319.   Passive income is an income received on a regular basis, with little effort required to maintain it. The American Internal Revenue Service categorizes income into three broad types, active income, passive income, and portfolio income.  Examples include book royalties and dividend-paying stocks. Investopedia defines passive income as "earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not actively involved."

BPKP-STAR Seminar with Professionals

On the second day of the BPKP-STAR Program, the Accounting Research Institute (ARI) organizes a one-day seminar on "Corporate Governance and Integrity for Public Sector" for the participants.  ARI has invited three professionals/practitioners to address the audiences.  They were namely Mr Mohamed Rezeidi, Deputy Director of the Private Sector Unit of the Malaysian Institute of Integrity (IIM), Mr Westmoreland Ajom, Superintendent and head of the forensic accounting unit of the Malaysian Anti-Corruption Commission (SPRM) and Dr. Bello Lawal Danbatta, an  Islamic Finance Expert and Group’s Chief Operating Officer (COO) of Rifcon Consulting Group.  Basically, participants were exposed to various facets of the public sector services through the set up of these government agencies. Whilst IIM was set up to promote integrity culture within the public sector, SPRM was established to mitigate corruption in government department

ARI-PBBM Training in Dubai, Jeddah, Madinah & Mecca

After a very successful training in 2014, the Malaysian Association of Statutory Bodies (Persatuan Badan-Badan Berkanun Malaysia or PBBM) invited the Accounting Research Institute (ARI) to co-organize another training program for its members to Jeddah in Saudi Arabia.  The 2nd Training titled "Islamic Practices & Development  Training - IPDT- 2015" has attracted 25 participants from various statutory bodies in Malaysia.  Two ARI fellows , Associate Professors Dr Zuraidah and Dr Jamaliah have been appointed by PBBM to facilitate the two-week training program.  Included in the training programs, is among others, participation at an international conference in Dubai, visiting successful corporations in Saudi Arabia, interaction with successful Islamic Finance researchers and scholars, Sharing sessions and colloquiums by participants with government & research agencies as well as performing Umrah in Mecca. PBBM-ARI Training Collaboration has been very successful.  Since 2012, ARI-PBBM has successfully organized professional training programs and site visits to New Zealand (forest & water management, tourism and public sector organisations), UK (Oxford University, Cambridge University, local authorities), Amsterdam (environmental management) and Saudi Arabia (Islamic finance, Islamic management, Wakaf & Zakat management).  The focus of the training programs is through "hands-on" approaches where participants are exposed to real-life situations and they have the opportunities to participate in real-life solutions. IPDT 2015 runs from 23rd November to 7th December 2015.  Next year, another training program has been planned for Bangalore, India.  Participants will have the opportunity to visit IT Silicon Valley in Bangalore and learn about the traits of "out-sourcing" as a mushrooming industry in India.

ARI-PBBM Integrated Training and Conference 2014

Day One

We arrived London in the early morning of 9th April 2014.  A total of thirty participants have registered for the Integrated Governance and Strategic Management Training Program 2014.  The first day included London City tour and two very interesting training events:  (i) A visit and talk on "Sharing How Institute of Education (IOE), University of London became a Leading Global Reference Centre in Education" and (ii) Leadership and Personal Development Talk by Ms Katrina A. Prentice, a leading business coach in the United Kingdom.  The visit to IOE was arranged by the Malaysian Higher Education Leadership Training Academy (AKEPT). The Institute of Education is a world-leading university specialising in education and the social sciences.

Founded in 1902, the Institute currently has more than 7,000 students and 800 staff. In January 2014, the Institute was recognised by Ofsted for its 'Outstanding' initial teacher training across primary, secondary and further education.  In the 2014 QS World University Rankings, the Institute was ranked number one for education worldwide.  In the most recent Research Assessment Exercise two-thirds of the publications that the IOE submitted were judged to be internationally significant and over a third were judged to be "world leading". In the evening, after dinner at the Malaysian Student Department, the delegates welcome Ms Katrina A. Prentice for her stunning talk on "Leadership Styles of Successful and Effective Leaders".  Katrina has been designing and delivering bespoke business solutions for a broad spectrum of clients within the UK, Ireland, Europe, Africa, South Africa and the Middle East for over 15 years.

 Her dynamic, powerful and charismatic style has enabled her to lend her skills and expertise as a Business Strategist, Trainer, Keynote Speaker and Executive Coach to a variety of clients including Vice Presidents,Ambassadors and key political figures to global public listed companies, SMEs and micro-businesses. Delegates were told that typically, an effective leader would motivate his or her subordinates to work on their strengths.  Such leader often "listen more" and "read more" as a way of continously improve his or her organisation.

Money Laundering Typologies

The Accounting Research Institute thanks ASP Mohd Noor Firdaus from the Royal Malaysia Police for sharing his AMLA-related investigations and experiences with students from the Master in Forensic Accounting and Financial Criminology program of Universiti Teknologi MARA. The class was told that one of the most important competencies that investigating officers need to know is the ability to develop typologies. Typologies refer to the methods or trends used by criminals to launder proceeds of criminal activities and finance illicit activities. In most cases, the methodologies are in constant evolution.  ASP Firdaus shared two famous typologies.  Firstly, the use of the traditional "Hawala" system remains a popular tool used by money launderers for transfer and receipt of funds.  Without "actual movement" of cash, funds are transferred from one country to another. The use of  "Contra Transactions" often makes audit trail difficult to do. Sometimes, such cash movement is settled through trade exchange and "cash contra".  Premised on the concept of trust, some "net settlement" may cover a long period of time. What makes them distinct from other money transmitters is their use of non-bank settlement methods. Secondly, money launderer criminals seek the advice or services of legal and accounting professionals to help in laundering criminal assets. As reporting institutions, it is crucial that these professionals be aware of their responsibilities to mitigate money laundering activities by their clients. Three specific responsibilities are: (i) to know their clients by conducting due diligence, (ii) to maintain full record of their tasks for at least six years and (iii) to submit "Suspicious Transaction Report or STR" to the Central Bank in the event that they become suspicious that their clients might be involved in possible money laundering activities.

Exploring AMLATFA 2001

AMLATFA 2001 is an Act or legislative provision that came into force on 15 January 2002.  Three main important objectives of the Act are:(i) to provide for the offence of money laundering, (ii) to specify measures to be taken for the prevention of money laundering and (iii) to provide for forfeiture of property derived from, or involved in, money laundering.  Today, the new cohort of the Master in Forensic Accounting and Financial Criminology made their first in-class presentation by discussing legislative provisions related to anti money laundering and anti terrorism financing in Malaysia. In essence, example of predicate offences in money laundering include the following: corruption, bribery, child pornography, CBT, forgery, human trafficking, theft, extortion, frauds, fraudulent manipulation of stock exchange transactions, possession of counterfeit money, tax evasion and money incremental scheme. The group had also highlighted different categories of reporting institutions which include all financial institutions (conventional and Islamic banks), insurance companies (including takaful operators), money changer, real estate agents, casinos, precious metal dealers and professional lawyers and professional accountants.

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.

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.

Accrual Accounting Courses for AG

As part of its preparation to educate its staff on the upcoming convergence from cash to accrual accounting, the Accountants General Office has requested the Accounting Research Institute (ARI) to conduct related training programs for the years 2012 and 2013.  The  Accrual Accounting training programs for both accounting and non-accounting staff will cover fourteen states (including the federal territory).  This nationwide training program will be coordinated by one of ARI's research centres - The Public Sector Accounting Research Centre (PSARC).  In implementing the program, ARI will be collaborating with researchers from the Faculty of Accountancy and state campuses of Universiti Teknologi MARA.  Today, researchers from ARI met up with officers from the Accountants General Office and the National Institute of Accountants to discuss content details of the training program.  Some of the cited reasons for the switch from cash to accrual accounting by the public sector include:

1. To provide better quality information to stakeholders
2. To improve the quality of financial management
3. To increase value for money
4. To reduce risk of manipulation
5. To enhance compatibility with the national accounts

Preparing for PhD Research Proposal

This week, aspiring PhD candidates of the university are attending an intensive research proposal workshop which is organized by the Institute of Leadership and Quality Managemenet (IlQAM). As one of the facilitators for the workshop, Prof Dr Normah Omar, Director of the Accounting Research Institute (ARI) delivered her talk today on a topic "Preparing a PhD Research Proposal". It was stressed in her talk that one of the most important elements of a research prosal is the identification of the right "PROBLEM STATEMENT". It is important in a proposal that the problem stand out so that the reader can easily recognize it. Sometimes, obscure and poorly formulated problems are masked in an extended discussion. In such cases, reviewers and/or committee members will have difficulty recognizing the problem. A problem statement should be presented within a context, and that context should be provided and briefly explained, including a discussion of the conceptual or theoretical framework in which it is embedded. Clearly and succinctly identify and explain the problem within the framework of the theory or line of inquiry that undergirds the study. This is of major importance in nearly all proposals and requires careful attention. It is a key element that associations such as AERA and APA look for in proposals. It is essential in all quantitative research and much qualitative research. State the problem in terms intelligible to someone who is generally sophisticated but who is relatively uninformed in the area of your investigation. Effective problem statements answer the question “Why does this research need to be conducted.” If a researcher is unable to answer this question clearly and succinctly, and without resorting to hyperspeaking (i.e., focusing on problems of macro or global proportions that certainly will not be informed or alleviated by the study), then the statement of the problem will come off as ambiguous and diffuse. Once the problem is clearly identified, pay attention to other important components of a proposal:
1. Title (Working Title)
2. Preamble/Introduction
3. Short Statement of the Problem
4. Research Objectives
5. Research Questions/Hypothesis
6. Review of Research Literature
7. The Design - Methods and Procedures
8. Tentative Time Table
9. References
10.Attachments/Appendixes

Financial Fraud Investigation Analysis

Master students from the Anti Money Laundering and Financial Criminology course presented their respective local financial fraud cases and showcased different analytical techniques which include Beniesh M-Score Model, Horizontal & Analytical Analysis, Ratio Analaysia. Fraud Risk Indicator Typology, Risk Management Model, Financial Integrity model, Accounting Anamolies Analysis. Some of the local cases presented include Transmile Berhad, Megan Media Berhad, Nasioncom, Tat Sang Berhad, Jasatera Bhd, Wimems Corporation Bhd, Welli Multi Corporation and Inix Group. One of the groups was presenting two cases of cheque fraud and how the use of the VSC6000 document analyzer machine was able to detect the fraud. The focus of the presentation was to highlight financial fraud investigation framework as well as analysis of the data collected. Most of the companies who were involved with financial reporting-related issues have since either been suspended or delisted from the local bourse.

Learning More About AML/CFT

In pursuing research in financial criminology, one must understand the laws governing financial fraud. One such law is Malaysia's Anti Money Laundering and Anti Terrorism Financing Act (AMLATFA 2001)which was introduced in 2001. Today we invited a Deputy Public Prosecutor (DPP) who was handling the AMLA and financial crime cases at the Attorney General Chamber office prior to his recent appoinment with the Malaysian Anti Corruption Commission (MACC). DPP Mohd Saifuddin shared his experiences with the Master of Forensic Accounting and Financial Criminology students on issues and challenges in implementing the Act. In his lecture, the DPP shared a lot of real case studies with the students. In gathering evidences for financial fraud cases, investigators must have the ability to "read in between the lines" and gather as much information from witnesses as they possibly could...

ARI Welcomes Mr Ismail Mahayudin

The Accounting Research Institute (ARI) welcomes Mr Ismail Mahayudin as our newly appointed Senior Research Fellow. His appointment is to train ARI researchers and to facilitate ARI in it's fundamental research in the area of Islamic Accounting and Muamalat. Mr Ismail has wide experience in this topic. He joined Bank Islam Berhad as General Manager of Trade Finance and Treasury Division in 1983. He was promoted to Senior General Manager, Retail Banking in 1994. He was a director of Al-Wakalah Nominees Sdn Berhad and BIMB Institute of Research and Training Sdn Berhad. As a professional trainer, he lectures and trains professionals in Trade Finance and banking Operations. His book titled "International Trade Operations", which was published by the BIMB Institute of Research and Training Sdn Bhd (BIRT) remains a source of reference for the Islamic banking industry.

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.

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".

Construct Development With Rasch Model

The university's Post Graduate Students Association organized another round of Rasch Model workshop with Mr Saidfuddin, a Rasch Model consultant and facilitator. Some of ARI's post graduate students and research fellows attended the two-day event, which is held at the Tun Abdul Razak Library's IT laboratory. Rasch Model is particularly useful when developing a questionnaire survey which relies a lot on "ordinal" data sources. Through Rasch Model analysis, a pilot study can be analyzed more effectively as it is possible to determine if the "content" items have been sufficiently supported by relevant theoretical underpinnings. In addition, it is also possible to analyse if the respondents have been appropriately selected for the study. Hence, it is still possible to reconstruct the questionnaire by improving the items content, recategorize the dimension, collapsing the scales or to specify better target sample for the final questionnaire.

Talk on Shariah Governance

In support of its HICoE niche area of Islamic Financial Criminology, the Accounting Research Institute (ARI)organized monthly lecture series, where industry experts and academics in the areas of Islamic Accounting & Finance and Financial Criminology are invited to give talks. Today, ARI invited Dr Ahcene Lahsasna, a researcher from INCEIF to present a topic on "Shariah Governance in Islamic Financial Institutions". Dr Lahsasna recently wrote a book titled "Introduction to Fatwa, Shariah Supervision & Governance in Islamic Finance. Prior to his engagement with INCEIF, Dr Lahsasna was attached with the industry and worked for several years at Manufacturer and Exporter group of companies in Malaysia as an International Marketing Manager. Currently, he is a Shariah Board member at Maybank Islamic and Etiqa Takaful in Malaysia and Shariah Advisory member for the Malaysian Financial Planning Council (MFPC Malaysia)

ARI's Two Newly Qualified Polygraph Examiners

The Accounting Research Institute (ARI) congratulates two researchers: Associate Professor Dr Rohana Othman (ARI Research Fellow) and Ms Munirah Morad (ARI Research Officer)for successfully completing a six week plygraph training at Malaysia's only Polygraph Science Academy. Both of them are now Qualified Polygraph Examiners. Since ARI is in the final stage of establishing its own polygraph laboratory, their certification is just timely. More researchers will be trained this year and we hope that through our polygraph lab, we will be able to train more forensic accountants to be competent with the polygraph machines. According to Wikipedia, the free encyclopedia, a polygraph machine(popularly referred to as a lie detector measures and records several physiological indices such as blood pressure, pulse, respiration, and skin conductivity while the subject is asked and answers a series of questions. The belief is that deceptive answers will produce physiological responses that can be differentiated from those associated with non-deceptive answers. ) ARI Polygraph laboratory is a contribution from the HICoE funding and will be fully operational by early 2012. Through our own Polygraph laboratory, we hope to be able to train as many people (especially forensic accountants and financial fraud investigators) as possible in the usage of polygraph machines as an investigative tool. Surely we will offer the study polygraph science as a possible elective for our Masters students. Research experiements can also be conducted to examine the incidents of lying by perpetrators and witnesses...

ARI Publication Workshop

The Accounting Research Institute (ARI) organizes a three-day publication workshop cum research progress presentation and strategic planning review. The event is attended by ARI fellows, heads of ARI's research centres & SIGs and ARI associate members. Whilst the publication workshop focuses on converting ARI HICoE research findings in Islamic Financial Criminology into indexed journal publication, the event is also used to monitor ARI HICoE research progress and strategic planning implementation. ARI's research fellow, Dr Rashid Amir, an upcoming author of indexed journal publications facilitates the publication workshop. Prof Rashidah, ARI's deputy director, monitors research progress. Meanwhile heads of ARI's research centres & SIGs and "C-Cure Initiative" Project Managers present the status of their strategic planning implementation. ARI has drawn a five-year 2011-2015 Strategic Planning which coincides with the university's Tenth Malaysia Plan (RMK). For the publication workshop, participants bring their draft journal articles. By the end of the workshop, corresponding authors will make online journal submission of their papers...

ARI Lecture Series on Takaful

Back in Shah Alam, the Islamic Accounting & Finance research team organized its monthly lecture series yesterday. The event was attended by many researchers from within the university. The lecture on Shariah Principles in Takaful was presented by Dato’ Mohd Fadzli Bin Yusof, a renowned Takaful scholar. Dato' Mohd Fadzli is a member of the Board of Directors of the Arab-Malaysian Takaful Company, a Jeddah-based Takaful operator, and Amana Takaful of Sri Lanka. He currently sits on the advisory committee for Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a subsidiary of the Islamic Development Bank (IDB). He retired as the Chief Executive Officer of Malaysia’s pioneer takaful operator, Syarikat Takaful Malaysia Berhad (Takaful Malaysia) in 2005. Under his stewardship, assets of Takaful Malaysia grew to RM 2.4 Billion. He led Takaful Malaysia in 2001 to be the first takaful company listed on Main Board of Bursa Malaysia. Takaful Malaysia was accorded ‘Best Provider for Takaful Services’ in 2004 by Euromoney, a London-based financial publication. Prior to joining Takaful Malaysia, he was a senior management of Malaysian National Insurance Bhd, then the largest insurance group in Malaysia. He was a member of the Special Task Force Committee set up by the Malaysian Government to formulate the regulatory and market framework for takaful industry in Malaysia