Happy New Year 2015

The Accounting Research Institute (ARI) wishes  a great New Year 2015 to all members and acquaintances.  May 2015 brings you greater success.

More News on GIFA 2014

It was such as honour for the Accounting Research Institute (ARI) of UniversitiTeknologi MARA for winning the Global Islamic Finance Awards 2014.  A full list of winners has been prepared by Edbiz Consulting the organiser as follows:

Best Paper at APMAA 2014

The Accounting Research Institute and Faculty of Accountancy, Universiti Teknologi MARA congratulate our PhD student Mr Hussein Hussein Sharaf-Addin for winning the Goodman School (of Brock University, Canada) Best Paper Award for his paper entitled "The Relationship Between Organizational Capabilities and Target Costing Implementation Decision: An Empirical Study of Malaysian Automotive Industry".  Mr Hussein presented his paper at the APMAA Conference 2014 in Bangkok.  The Best Paper Award came with an Award certificate and Prize money of USD300 and a 10,000 Baht PhD Colloquium scholarship from Chullalongkorn Business School of University of Chullalongkorn.  Congratulations Hussein.

Prestigious GIFA 2014 Award for ARI

The Accounting Research Institute (ARI), Universiti Teknologi MARA (UiTM) was awarded the Best Islamic Finance Education Provider 2014 at the Global Islamic Finance Award (GIFA) 2014 on 27 October 2014 at the award ceremony held at the prestigious H Hotel, Dubai, United Arab Emirates. The award was accepted by the Vice Chancellor of UiTM, Tan Sri Dato’ Sri Prof Ir. Dr Sahol Hamid Abu Bakar. Also present at the award ceremony were the Deputy Directors of ARI, Associate Prof Dr Zuraidah Mohd Sanusi and Associate Prof Dr Jamaliah Said, Head of one ARI’s research centers, the UiTM-ACCA Asia-Pacific Centre for Sustainability (APCeS), Associate Prof Dr Faizah Darus and one of ARI fellows Dr Norazida Mohamed. As a HiCOE, ARI aspires to be an international research center focusing on research in its niche area of Islamic Financial Criminology (IFC). Among the research areas in Islamic finance that ARI has been actively involved in research is in the area of Islamic microfinance, Islamic Corporate Social Responsibility (i-CSR) and Shariah audit.  Global Islamic Finance Awards (also known as "GIFA") are one of the most prestigious awards in the Islamic banking and finance sector.  The objective of the GIFA is to highlight the best practices in Islamic banking and finance and celebrate the success of institutions and individuals, with the ultimate objective of promoting social responsibility, Shari’a authenticity and commitment to Islamic banking and finance. This award recognizes and celebrates the achievements and contributions of individuals and institutions in the Islamic financial services industry.  Congratulations all

APMAA Conference 2014

The 10th annual conference of the Asia Pacific Management Accounting Association (APMAA) is hosted by the Chullalongkorn Business School of the University of Chullalongkorn Thailand.  Themed "Management Accounting in a Global, Dynamic Environment: Challenges and Opportunities", the 3-day conference (27-30 October 2014) is to be held at the Crowne Plaza Hotel, Lumpini, Bangkok.  APMAA was formally established in 2004 in Fukuoka, Japan with founding committee members from Kyushu University (Japan), Kyushu Sangyo Univesity (Japan), Universiti Teknologi MARA (Malaysia), University of Chullalongkorn (Thailand), Nanyang Technological University (Singapore) and Seoul National Universty (Korea).  Members of APMAA take turn to host the annual conference.  The 2014 conference is attended by 200 participants.  One of the greatest characteristics of the APMAA conference is the fact that all submitted and approved papers are assigned discussants to constructively review the papers so that the papers will be further improved for publication in good academic journals.  Preceding the actual conference itself is a PhD colloquium, where PhD students are encouraged to present their research projects and get feedback from experts in the research areas.

HICoE Meeting with Director General, Dept of Higher Education MOE

The Accounting Research Institute (ARI), together with directors of six other Higher Institutions' Centre of Excelelnce (HICoE) recently met up with the Director General, Department of Higher Education, Ministry of Education, Professor Dato' Dr Asma Ismail.  The meeting discussed  among others: MOE's plans about current HICoEs;  Criteria to measure Regional and International participation and benchmarking of current HICoEs. Also presence at the meeting was Prof Dr Raha, director of BPKI.  ARI was represented by Prof Dr Normah Omar (Director), Associate Professor Dr Zuraidah Sanusi and Associate Professor Dr Jamaliah Said (Deputy directors).  The other HICoE directors who were present were: Prof Dato' Dr Abdul Rahman Jamal (UMBI), Prof Dr Abdul Rahman Omar (IBS), Prof Nasruddin (UMPEDAC), Prof Sharif (CDR), Prof Mohamad Azmi (INFORMM) and Prof Lukman (ENOS).  Moving forward, all existing HICoEs are to move to greater heights by placing the HICoE agendas to the international arena.

Islamic Microfinance Project with Yayasan DiRaja Sultan Mizan

The Accounting Research Institute (ARI) thanks Yayasan DiRaja Sultan Mizan (YDSM) for inviting our fellows to participate in a collaborative project involving Islamic Microfinance.  Islamic Microfinance Governance is one of ARI's research clusters within its research niche of Islamic Financial Criminology.  YDSM was established on 11th May 2005 as a charity organisation.  One of the main aims for its establishment is to elevate the socio-economy status of Terengganu subjects.  There has been numerous entrepreneurial activities undertaken by YDSM.  ARI's Islamic Microfinance model, a collaboration between ARI, Amanah Ikhtiar Malaysia (AIM) and Mydin Holding may suit YDSM's need to facilitate entrepreneurs in Terengganu.  Discussions were held in Kuala Terengganu  on the weekends between ARI fellows and officials of YDSM.  Possible local financiers as well as local suppliers and marketeers have been identified to enable ARI's microfinance model to be emulated in Terengganu.  ARI's entourage was headed by Associate Professor Dr Jamaliah Said, who is also ARI Deputy Director.

Seminar Presentation on Money Laundering

The Accounting Research Institute (ARI) congratulates students from the AFC713 class for a very creative seminar presentation on money laundering. The so-called "Tell-lah" talk show aims to educate professionals such as accountants, lawyers, real estate agents, precious stone dealers and company secretaries on their responsibilities to mitigate money laundering activities.  Today, money launderers have shifted their modus operandi from using financial institutions to using these professionals as conduits in their money laundering activities.  The "Tell-lah" talk show highlights the responsibilities of professional accountants, also known as "Designated Non-Financial Businesses and Professions or DNFBPs" who as reporting institutions, must at least do the following basic tasks: (1) Keeping detailed records of transactions, (2) Conducting Customer Due Diligence and (3) Reporting Suspicious Transactions.  The class had earlier conducted an online questionnaire survey on professional accountants and shared their research findings in the "Tell-lah" talkshow. Interestingly, the survey found that in general, the professionals are aware of the legislative requirements of the Anti-Money Laundering and Anti Financial Terrorism Act (AMLATFA 2001).  On the questions as to why the compliance rate on AMLATFA is low among DNFBPs, the survey highlighted three very important findings.  Firstly, the cost of compliance, which involve high cost in providing awareness on AML-CFT Compliance programs.  Secondly, ineffective training CPD program to highlight real money laundering typologies and finally,  relates to their perceptions on the ineffective enforcement of the law.  Another interesting observation is the fact that they (the professionals) do not think that their clients "are involved in money laundering activities.  The "Tell-lah" talkshow provided some interesting recommendations which included introducing talkshows and short anti-money laundering campaigns in advertorials in the media.  Congratulations class for job well done.

Risk Indicators for Trade Mispricing

Trade Mispricing, which is a form of money laundering is the deliberate over-invoicing of imports or under-invoicing of exports by entities in a country, usually for the purpose of avoiding paying tax or levies in that country. In fact tax evasion constitutes one of the predicate offences included in the anti-money laundering legislation of most countries globally.  In January 2012, the Organization for Economic Cooperation and Development (the OECD) published a guideline entitled "Dealing Effectively with Transfer Pricing".  Useful checklist of risk indicators implying the occurrence of transfer price manipulation or trade mispricing include the following:
(1) Intangible assets utilized by group companies but no royalty paid, 
(2) Cost sharing with no foreseeable benefit, 
(3) Companies involved in transactions that might be overlooked, 
(4) Companies making losses over a number of years, 
(5) Sustained losses by local entities, but (overall) profits in the group, 
(6)  Margins suddenly decrease with no rationale, 
(7)  Companies with overseas subsidiaries with start-up losses,
(8)  No formal agreement for services or finance provision with no recharge of costs, 
(9)  Secondments undertaken on “non-commercial” terms (i.e. no recharge and no agreements), 
(10)  Companies with related party transactions where the related party has a low marginal tax rate and makes payments which appear to be large in reference to the relationship, 
(11)  Debt levels, intra-group loans and guarantees that are “non-commercial”, 
(12)  Trading debtor balances – intercompany, long term, interest free, 
(13)  Dormant companies with intercompany creditors and net assets/investments, 
(14)  There are additional risk indicators flagged by tax authorities as requiring audit, 
(15)  Companies paying large management fees or paying royalties or other charges for the use of intellectual property, (16)  Companies undertaking contract R&D on a cost plus basis – tax authorities may challenge the basis of remuneration and argue that a local country is contributing towards the creation of an intangible, 
(17)  Group members who have acquired, created or enhanced an asset that is used by other group members, perhaps by incurring expenditure on research and development leading to the creation or enhancement of intellectual property, (18)  Companies with innovative business structures, 
(19)  Significant group reorganizations involving business transfers overseas, 
(20)  Transactions with tax havens or shelters, 
(21)  Companies in a commercial relationship with a related party where non-tax factors provide incentive for manipulation , 
(22)  Loss making companies in commercial relationship with a lower marginal rate taxpayer where the loss is as a result of payments to that entity, 
(23) Risks arise where transfer pricing policies and methodologies are not up to date and do not or no longer accurately reflect the operation and management of the business. 
These are indeed useful indicators that researchers and anti-money laundering agencies can use to develop possible typologies for money laundering offences.

Farewell Prof Dr Rashidah Abdul Rahman

The Accounting Research Institute (ARI) thanks our beloved fellow, Professor Dr Rashidah Abdul Rahman who recently took optional retirement.  Prof Rashidah was involved directly with the establishment of ARI way back since 2002 when she formed the Corporate Governance Special Interest Group.  The SIG was later "upgraded" when a MOU was signed with the Chairman of the Malaysian Institute of Corporate Governance  
(MICG), Tan Sri Megat Najmuddin in early 2003.  Spearheaded from that event was the establishment of more research centres.  Today, there are eight research centres in ARI: (1) UiTM-MICG Corporate Governance Centre , (2) UiTM-CIMA Management Accounting Cente, (3) UiTM-ACCA Financial Reporting Centre, (4) UiTM-CPA Australia Public Sector Centre, (5) Forensic Accounting Centre, (6) Islamic Accounting & Muamalat Centre, (7) Sustainability Research Centre and (8) GLC Research Centre.  Prof Rashidah was ARI's Deputy Director until her recent retirement.  As a research at ARI HICoE, Prof Rashidah was the head of the Shariah Governance Research Cluster.  Through her leadership, a new business model of Islamic Microfinance was developed by ARI HICoE.  The business model was pilot-tested through a collaboration with the Amanah Ikhtiar Malaysia (AIM) as microfinance financiaer and Mydin Holding as supplier and marketer.  The Tanjung Karang tailoring business project is Prof Rashidah's landmark success in promoting Islamic Microfinance as a strategic tool to alleviate poverty among the Ummah.  Professor Rashidah has gone to many countries to promote the business model.  Today, two countries namely Philippines and Tunisia have indicated their interest to emulate the Tanjung Karang project to their respective countries.  Within the last 5 years as ARI fellow, Prof Rashidah has published more than 100 papers in indexed journals and presented key note papers in many international conferences. We will certainly miss you Prof Rashidah, God bless you always.