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The Inland Revenue Board Malaysia (the lRB) is streamlining the tax administration policies to embrace an electronic tax filing (e-filing) system. With the e-filing system, taxpayers and their representatives can transmit tax returns, payment and information directly to the IRB electronically rather than mailing the paper forms. Experiences of overseas counterparts that have embraced e-filing system have shown that the e-filing system can only work effectively with the assistance and cooperation of tax practitioners. However, at the time of this study, little is known about Malaysian tax practitioners' reactions towards the e-filing system. ln response, this study has, emerged to fill a research void. The objectives of this study are to examine tax practitioners' technology readiness, acceptance and compliance considerations of the e-filing system. A mail survey was used for data collection. Using the systematic sampling method, questionnaires were mailed to 600 tax practitioners throughout Malaysia. Firstly, the Technology Readiness Index (TRI) of Parasuraman and Rockbridge Associates, Inc (1999) was adapted to assess the state of technology readiness amongst tax practitioners. Secondly, an integrated technology acceptance model was developed to examine tax practitioners' acceptance of the e-filing system. The theories underlying the integrated technology acceptance model were generated from the social psychology, information systems, accounting, taxation and marketing literature. Thirdly, this study examined the inherent compliance considerations confronting tax practitioners and also evaluated the importance of five different types of incentives that would motivate tax practitioners to use the e-filing system. Based on TRI, the findings indicated that the respondents were positive towards new technologies. Nonetheless, they were wary about the security of the Internet technology. The respondents were segmented into explorers ( 15% ), pioneers (36% ), sceptics (21 % ), paranoids (26%) and technology laggards (3% ). The structural equation modelling technique was used to test the integrated technology acceptance model. Results showed that behavioural intention (a proxy for technology acceptance) was significantly influenced by the tax practitioner's perceived usefulness, perceived ease of use and perceived insecurity of the e-filing system, as well as perceived behaviour control and social norms. In addition, the survey uncovered the unwillingness of tax practitioners to pay a service fee and their lack of confidence in the electronic administrative capabilities of the IRB. Such factors appeared to discourage the take-up of the e-filing system. At the same time, the survey indicated that the quest for a 'speedy tax refund' ranked the top most important incentive to motivate the use of the e-filing system. Overall, this study provides the needed empirical evidence to the current literature by expanding into a relatively unstudied area of Malaysian tax environment. This study found the applicability of technology acceptance model in Malaysia. The findings have implications and contributions to the tax authonties, and the tax practitioners besides contributing to the theory on modelling user's acceptance of the e-filing system. In addition, this study enhances our understanding on the importance of AICPA's (2001) guiding principles of good tax policy in developing and diffusing the e-filing system in the Malaysian tax environment.

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This study seeks to contribute to the development of knowledge about factors that influence accountability at subunit levels in the local government of Malaysia. Further, this study examines the possibility of significant contingency model paths relationships to provide insights about the ‘fits’ between sets of contingency, control systems and accountability outcomes variables in LAs in Malaysia. This study looks into the public sector control systems that allow managers to manage while holding them accountable for results. There are relatively few research studies that analyze the contingency approach to MCS design in public sector, particularly, the local government, and the mediating effect of levers of MCS on the relationship between the contextual variables and the rendering of the respective dimensions of accountability. The same can be observed about discussions on the relationship between psychological empowerment, task difficulty, situational constraint and levers of control and accountability. Based on the contingency theory modelling, this study proposes a framework that explicates the link between the relevant contextual variables; psychological empowerment, task difficulty, situational constraint, levers of MCS and the dimensions of accountability.This study was conducted on all three types of local authorities in Peninsula Malaysia, namely the city council, municipal council and district council. Primary data was collected through questionnaire survey on a sample of 665 head of departments and supervisory subordinates of local authorities departments comprising mainly those providing direct services to the public. The results of the tests on the hypotheses can be summarized as follows: Firstly, using cluster analysis, results identified three dimensions of accountability to exist in the Malaysian local authorities. Managerial/public, fiduciary and political accountability classify the disposition of Malaysian LA departmental managers’ discharge of accountability; Secondly, the path analysis results indicated that (1) psychological empowerment has significant direct effects on the respective dimensions of accountability; (2) task difficulty has significant inverse direct effect on the respective dimensions of accountability. On the contrary, there is no significant inverse direct relationships between situational constraint and accountability; (3) levers of MCS has significant direct influence on the respective dimensions of accountability; (4) the levers of MCS have full mediating function on the relationship between psychological empowerment and task difficulty and dimensions of accountability. In conclusion psychological empowerment and the extent of task difficulty faced by departmental heads and subordinates influence the rendering of respective types of accountability by those departments but not situational constraint. The four levers of control enhanced the multifarious types of accountability. Furthermore, the levers of MCS mediate the relationships between psychological empowerment and task difficulty and accountability of departmental managers in local authorities in Peninsula Malaysia. Finally, the study suggests directions for future research.

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The main objective or this study is to examine the stock market reaction to various announcements by Rating Agency Malaysia (RAM) and the Malaysian Rating Corporation (MARC). The investigation involves testing the presence of the wealth effect following these announcements; examining whether the size of leverage matters in determining the extent of the market reaction to downgrades: testing whether the patterns of market reaction to each rating announcement have changed following the South East Asian financial crisis of the 1997/98 and evaluating the impact of corporate bond upgrades and downgrades on the yield premium. The stud) uses daily data for the stock returns for the period spanning from 1993 to 2003. and monthly data for the bond yields for the period that stretches from 1999 to 2003. Data were obtained from Rating Agency Malaysia (RAM) the Malaysian Rating Corporation (MARC). Bursa Malaysia (formerly, KLS[), Ne\v Straits Times (NST) database and Bank Negara Malaysia (f3NM). Abnormal returns are calculated using two statistical models under the framework of event study methodology. Namely. the OLS market model and the ARMA-GAR CH lag specification of the market model. On the other hand. the average differential yield premium is calculated using the method of differential yield premium (DYP). We find that. while corporate bond downgrades trigger a negative market reaction. upgrades du not. Significant fall in the wealth of shareholders is identified only ,with corporate bond downgrades. There arc some signs of information leakage in the market. We also find that for high leverage firms, a downgrade does not matter. However. for low leverage firms. a downgrade causes significant decline in returns. Downgrades post-crisis are less significant to the market as compared to downgrades pre-crisis. perhaps, due to the tighter disclosure requirements imposed by the Securities Commission following the crisis. The tests designed to uncover the implications of corporate bond rating changes to the efficiency of Bursa Malaysia implies that the market is efficient. Finally. we find that the yield premium increases significantly following corporate bond downgrades. However. following bond upgrades. the yield premium falls.

The author discusses the issues arising in the methodology of economics and highlights - in a unique comparative style - the bases on which the Islamic and the secular dispensations come out. It is found that the Islamic and the secular methodologies of economics have divergent ideological bases, value frames, meanings of basic concepts, behavioral rules, and the procedures for erecting theories and installing their verification procedures. These differences also condition the nature and scope of the two methodologies and the subject of their economic disciplines. The author also outlines the policy implications of the two methodologies on current world affairs and demonstrates that Islamic economics - as a discipline - has a superior (and also a supervising) quality (haymana) that is lacking in secular economics. This result arises from the logical relationship between the Islamic and the secular worldviews and their impact on the methodology of economics. As such, the subject of Islamic economics - and its future development - shall always remain epistemologically 'greater than' and will overwhelmingly 'overpower' the subject of secular economics from all theoretical positions and aspects.

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The main objective of this dissertation is to investigate the source of macroeconomic fluctuations in China for the period 1978 to 2004 by (1) establishing the main feature of macroeconomic fluctuations; (2) identifying the sources of macroeconomic fluctuations and evaluating their impacts on Chinese domestic key variables using the structural vector autoregression (SVAR) model; and (3) investigating the business cycle dynamics between China and ASEAN core countries. The analysis shows that China's business cycle, except of some idiosyncrasies, is similar to those of other developed economies. The results from the stylized facts indicate that both demand and supply side shocks are important in generating the macroeconomic fluctuation in China. The SVAR analysis also reveals that both demand and supply shocks explain most of the fluctuations in Chinese output. Domestic supply shocks are the most important factor in explaining the fluctuations of Chinese output both in the long run and short run. Nominal shocks are the main sources of real effective exchange rate (REER) variation. Our results also show that domestic supply shocks are the leading causes of the price changes in the long-run. Domestic demand shocks are the single most important factor for the movement of real money balance. Our result also shows that the pattern of business cycle synchronization between China and ASEAN has substantially changed. There is strong evidence in favour of the existence of a common cycle for ASEAN countries. However, the long run relationship becomes stronger and the speed of adjustment becomes even faster across the ASEAN countries when China is included in the cycle. More interestingly, the speed of adjustment becomes even faster in the second sub-period when the full period is split into two sub-periods, which indicates a higher degree of economic integration between China and ASEAN countries. These findings are important in understanding the macroeconomic fluctuations in Chinese economy and most importantly they can be used in designing effective macroeconomic policies In China. The results are also important in designing any coordinating policy between China and ASEAN countries.

Since industrialization, air pollution has been substantially increasing in many urban centres, having adverse effects on human health. Studies have been conducted, mostly in industrialized countries, to reveal this critical ecological phenomenon. In developing countries, the same research is scanty. This present study, conducted in Indonesia, attempts to contribute to fill this gap. The study is primarily based on Ostro (1994), using the WHO Guidelines as the primary benchmark, along with the Indonesian Standards. This method applies to the latest data (2001-2002) for particulate matter (PM10), nitrogen dioxide (NO2) and lead (Pb), after the improvement of the air quality management system (AQMS) in Indonesia. Jakarta is selected as the study focus, in comparison with three major cities of Java: Bandung, Semarang and Surabaya. Apart from Ostro, the work of Pengelly et al., (2000) is considered for method comparison. The third comparison examines the estimates found here with those of previous studies of Jakarta. While Ostro and Pengelly et al., concern themselves only with the health effects, this study extends its scope to estimate the costs of premature mortality and various morbidity outcomes using the human capital and costs of illness approaches, respectively. It is found that the estimated cases attributable both to PM10 and NO2 for Jakarta are more than double the cumulative estimates for the remaining cities. For comparison of the studies of Jakarta, the estimates of PM10 are lower than those found in the previous studies, except Ostro (1994). The cost estimation also shows similar results. Irrespective of the method used, the estimates for Jakarta are about 2.6-fold compared to the total of the other three cities. With respect to PM10 in Jakarta, the estimates, using the 2002-base price, are found to be higher than those of any previous study, with the morbidity effects being significant contributors. While NO2 does not provide any significant effect, the total costs of lead for 2001 are estimated to be higher than the previous results. No estimate is found for 2002. In conclusion, there had been an upward trend of air pollutants in Indonesia, especially in Jakarta, in the 1990s with first upward movement reaching so high a level that the Government took immediate measures such as establishing the integrated monitoring system along with other supportive programmes; concurrently, more serious law enforcement has been undertaken to correct the behaviour of the parties generating air contaminants. Following this, the national networking in monitoring air quality has contributed in improving the environment, at least, in Jakarta.

The importance of financial development (bank and the stock market) in accelerating economic growth has been extensively discussed in both theoretical and empirical studies over the past three decades. The findings of these studies generally suggest that a well-developed financial system tends to have positive impacts on economic growth. However, unlike bank and stock market development, literature examining the role of non-bank financial intermediaries (NBFIs) in influencing economic growth is sparse. This research aims to fill that gap by examining empirically the role of NBFIs in economic growth for the case of Malaysia. The study employs a recently developed autoregressive distributed lag (ARDL) bounds testing approach to cointegration to examine the long-run relationship between NBFIs and economic growth in Malaysia using annual data covering the period 1971-2004. Unlike the other widely used cointegration approach such as Johansen and Juselious (1990), this approach is particularly promising as it is suitable for a small sample size like the present study and also capable of testing the existence of long-run relationship irrespective of whether the underlying variables are of order I(0) or I(1) or mutually cointegrated. The study finds evidence of long run cointegrating relationship between the indicators of NBFIs development and the economic growth in Malaysia. The regression results show that the total assets of NBFIs have positive long run relationship with economic growth and the private credit (other indicator of NBFIs) has positive and significant impact on long run economic growth. Furthermore, the positive and significant coefficient of NBFIs assets supports the concept that NBFIs assets can influence long run growth indirectly through investment channel. Granger causality test shows that in the long run there is bidirectional causality between the indicators of NBFIs and economic growth. In the short run, there is evidence that the NBFIs assets Granger cause economic growth with no reverse effect but in the case of private credit causality is bidirectional. In addition, the study finds evidence that NBFIs assets have significant causal impact on other financial sectors’ development (banks and stock market) and also independent causal influence on economic growth. The study suggests that the development of NBFIs is important for both long run economic growth and for other financial sectors’ (banks and stock market) development. As such, promoting the NBFIs can simultaneously meet the objective of achieving a sound financial system and hence sustainable long run economic growth in Malaysia.

Since the mid-1990s, there has been an increasing trend of retail globalization. This phenomenon has led to rapid expansion of large-scale retailers into many countries across Southeast Asia, Central Europe and Latin America. This emerging trend has triggered a number of research interests on the issue of retail globalization and its impact on host countries. This study was initiated after observing an increasing trend in the presence of foreign retailers (especially hypermarkets) in Malaysia beginning mid-1990s. The primary purpose of this research is to investigate the impact of liberalization of distribution services via the presence of foreign hypermarkets in Malaysia on local retailers, consumers and also suppliers. Both quantitative and qualitative methods (survey and interviews) were used to collect and analyze the data. A total of 300 (consumer survey), 135 (retailer survey) and 45 (supplier survey) questionnaires were completed. Three towns – Batu Caves, Puchong and Wangsa Maju- were selected as research locations. Descriptive statistics were computed including frequencies, means, median, modes and standard deviations and cross tabulation. It is generally found that the establishment of foreign-owned hypermarkets has both a positive and a negative impact on the Malaysian retail market. While local consumers were positively affected by the presence of foreign hypermarkets, the impact on local retailers and product suppliers shows mixed results. Majority of the respondents welcome the presence of foreign hypermarkets as these outlets offers cheaper products, wider product variety, improved product quality, longer opening hours and convenient ‘one-stop-shopping. Existing local retailers had mixed feelings about the presence of hypermarkets. Meanwhile findings from the supplier survey reveal a number of interesting points. The general picture is that there does, indeed, exist a fairly substantial relationship between domestic suppliers and foreign hypermarkets. The recommendations and strategies for local retailers, suppliers as well as policymakers were also discussed.

The progress in the Malaysian Islamic capital market (ICM) is the envy of the international community since Malaysia is now regarded as one of the leading centers for Islamic finance. To maintain this position, research on the present market is imperative. Hence, this two-part study is undertaken to fill that role. The first part evaluates the performance of Kuala Lumpur Shariah Index (KLSI) and RHB Islamic Index (RHBII) against the market benchmark, Kuala Lumpur Composite Index. To that end, the method employed involves the measurement of performance; and measurement of risk, selectivity and timing. The second part tackles the issue of beta relevancy in describing returns. The capital asset pricing model (CAPM) in the traditional and conditional forms are examined in addressing this issue. Our research also seeks to discover the characteristics of beta for sharīc ah-compatible securities. For this, the ordinary least squares and generalized method of moments estimation techniques are utilized. To achieve these goals, the phase from April 1999 until June 2005 is treated as the sample period. The findings show that the Islamic betas are positive and less than one. More importantly, the results reveal that KLSI is of poorer quality than RHBII and both Islamic indices are not market competitive. Furthermore, there is evidence for the significance of beta from the results of not only the traditional CAPM, but also the conditional CAPM. Thus, we conclude by confirming the relevance of beta for the exploits of the practitioners and by critically arguing that FTSE Bursa Malaysia EMAS Shariah Index and FTSE Bursa Malaysia Hijrah Shariah Index might not be good enough in alleviating our concern on KLSI. Therefore, the Islamic version of the FTSE Bursa Malaysia 100 Index is proposed to stimulate more encouraging developments for the Malaysian ICM.

In the study, basic needs gap indexes (BNGIs) are computed and then used to measure the performances of twenty-one selected developing countries: Algeria, Bangladesh, Brazil, China, Columbia, Egypt, Ethiopia, Ghana, India, Indonesia, Kenya, Malaysia, Mexico, Morocco, Nepal, Nigeria, Pakistan, Peru, Philippines, Tanzania and Thailand for the period from 1990 to 2002. Then the BNGIs are used to find the significant determinants that influence them from nineteen selected variables: per capita GNP, per capita GNP growth, debt servicing, proportion of Muslim population, net general government expenditure, trade, share of income of the poorest 20%, combined expenditure on education and health, proportion of urban population, ratio of income of the richest 20% to the poorest 20%, household consumption, military expenditure, population growth, rate of inflation, population below the poverty level, food consumption, expenditure on clothing and footwear, total adult illiteracy and land under crops. Three types of tests are applied: comparing BNGI group averages, a country-wise analysis and finally the multivariate regression tests on ten variables namely, growth, debt servicing, trade, military expenditure, share of income of the poorest 20%, ratio of income of the richest 20% to the poorest 20%, inflation, adult illiteracy, population growth and land under crops. The problem of basic needs fulfilment existed in all countries across the board, countries with stronger economies recording the highest levels of BNGI. Strong relationships were recorded in most of the variables except for per capita GNP, growth, education and health, clothing and footwear, Muslim population and trade. However, at very low levels of growth or when the growth was negative, positive relationships with the BNGI were observed. On education and health, and trade they were always identified with high income countries where even the poor in those countries were excluded from their enjoyment. Strangely, debt servicing, military expenditure, population under the poverty level, land under crops and population density behaved different from what was expected of them

The research consists of two studies; a major study on banking risk management practices and a minor study on the relationship between financial risks and profitability. The study on risk management explores the risk management practices of both the Islamic and conventional banks. It compares and contrasts the way both systems manage their risks and investigates if there is any convergence in the practice of risk management between the conventional and Islamic banking system. The survey conducted on the risk managers of the conventional banks and Islamic banks in Malaysia as well as the Islamic banks outside Malaysia revealed many interesting results. It is found that there exist differences in the practice between the two systems and that the Islamic banks are lagging behind in the adoption of enterprise wide risk management. Although collectively, the conventional and Islamic banks face moderate level of adequacy of risk management tools, Islamic banks indicate that the three most critical areas are lack of information technology (IT) professionals with relevant expertise in the process of integration and risk analytics, IT systems to cater for each Islamic instrument and also the capacity of human capital in the highly technical areas of risk management. This implies that more innovations and product developments are needed for Islamic banking in managing risks. Hence serious effort in training and educating the human capital, well versed in the Islamic principles as well as the technical and quantitative sciences disciplines as the integration of this knowledge is important in order to preserve the Islamic banking industry specifically and the Islamic financial system generally, from degradation and being relegated to just forms only. The second part of the study employs panel data regression analysis of Generalised Least Squares of fixed effects and random effects models to examine the relationship between financial risks (credit risk, interest rate risk, liquidity risks) and profitability (ROE and ROA) of the conventional and Islamic banking in Malaysia for the period between 1996 and 2005. It was found that credit risk has a significant impact on ROA and ROE for the conventional as well as the Islamic banks. The relationship between interest rate risk and ROE were found to be weakly significant for the conventional banks and insignificant for the Islamic banks. The effect of interest rate risk on ROA is significant for the conventional banks. Liquidity risk was found to have an insignificant impact on both profitability measures.

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The function of management accounting systems (MAS) in an organization has evolved from the traditional cost determination and financial control role to a more sophisticated role of value creation through the effective use of resources. Financial institutions are experiencing rapid transformation due to financial liberalization, rapid advancement in technology, intense market competition, and the emergence of increasingly innovative products and distribution channels. To remain competitive, they need sophisticated MAS information for informed decision making and to create value for the long term success and survival of the organization. Due to the lack of management accounting research for financial services, this study investigates the factors influencing MAS sophistication among financial institutions in Malaysia and examines whether it leads to enhanced organizational performance. Sophistication of MAS is viewed in a broader aspect by focusing on the four dimensions of MAS information – scope, timeliness, integration and aggregation. In addition, since financial institutions are essentially in the business of managing risks, this study also explores the relationship between enterprise risk management (ERM) and MAS. In ERM, performance management, which is the most important role of MAS, is integrated with risk management. With the existence of a dual banking system in Malaysia, it is also important to explore the difference between MAS of Islamic Financial Institutions (IFIs) and that of conventional financial institutions. Based on the contingency theory framework, this study adopts an explanatory sequential mixed method approach that was conducted in two stages. In the first stage a survey was conducted on the banking and insurance companies listed on the Central Bank of Malaysia website, with the chief financial officers (CFO) as the respondents. In the second stage, post-survey semi-structured interviews were conducted with selected respondents. Based on multiple regression analysis, the results indicate that perceived intensity of market competition and technological advancement influence MAS sophistication. The results provide support of a direct relationship between MAS and organizational performance and show some support for the mediating role of MAS between contextual variables and performance. The post-survey interviews further support the results. The findings from the survey and the post-survey interviews also show that MAS and risk management complement each other. However, there was not enough evidence to support the role of risk management in enhancing the relationship between MAS and organizational performance. The post-survey interviews provide some insights into this issue. The findings further show that IFIs use more sophisticated MAS than conventional financial institutions. Overall, this study demonstrates the importance of MAS sophistication for coping with the intensity of market competition and of rapid technological advancement in financial institutions to achieve better performance. In addition, the study also provides evidence of the importance of MAS and risk management as integral management tools for corporate performance management. Finally, as IFIs have to adhere to the SharÊÑah compliance framework they require more sophisticated MAS to manage their organizations effectively. The findings contribute to financial institutions and regulators as well as towards testing a comprehensive contingency model that includes multiple contingent factors, multiple elements of accounting systems, and multiple outcome variables.