Research Report: Accounting Standards and Maybank Case Study

This report examines the critical role of accounting standards in financial reporting, using Maybank as a case study. The research investigates the importance of accounting rules and standards for companies, particularly within the banking sector, and identifies the significance of valuable accounting policies for Maybank in preparing accurate annual reports. The study also explores the consequences of non-compliance with accounting standards, highlighting the impact on stakeholders and financial credibility. The methodology includes a quantitative approach, data collection, and analysis to support the findings. The report includes a literature review, data analysis, recommendations, and conclusions, offering a comprehensive understanding of accounting standards and their implications for Maybank. The research aims to ascertain the importance of various accounting standards on the performance and authenticity of a company, particularly in the Malaysian banking context. The study also provides recommendations for improved compliance and reporting practices, and a reflection on the research process.

Research methodology

Table of Contents
INTRODUCTION...........................................................................................................................1
METHODOLOGY..........................................................................................................................1
CHAPTER 2: LITERATURE REVIEW.........................................................................................3
Role of accounting rules and standard for a company...........................................................3
Importance of valuable accounting policies and standard for Maybank which support in
preparing appropriate annual reports for various parties:.......................................................4
Consequences of non Compliance of accounting standards:.................................................5
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................7
Type of Investigation..............................................................................................................7
Research Approach.................................................................................................................7
Research Philosophy..............................................................................................................7
Data collection........................................................................................................................8
Sampling.................................................................................................................................8
Data analysis...........................................................................................................................8
Ethical consideration..............................................................................................................9
CHAPTER 4: DATA ANALYSIS................................................................................................10
CHAPTER 5: Recommendation & Reflection .............................................................................21
Recommendations................................................................................................................21
Reflection.............................................................................................................................22
CHAPTER 6: Conclusion..............................................................................................................23
REFERENCES..............................................................................................................................24

TOPIC: Role of accounting standards. A case study on Maybank.
INTRODUCTION
In present time, it is necessary for every company to follow and implement the
appropriate accounting standard while preparing valuable reports (Cai, Rahman and Courtenay,
2014). This is because it help to clearly defines the actual financial position of company during
that year and determined the areas which needed to be modified. Accounting standards keep
investors on the same page, business owners and regulators. It is easier to assess the results when
all companies adopt the same accounting practices. The regulations often prohibit businesses
from using the accounting areas to their own benefit. In this research Maybank is selected which
is a leading bank of Malaysia and provide number of banking and insurance services to large
number of people.
Aim
“To recognise the importance of various accounting standard on the performance and
authenticity of company.” Study related with Maybank.
Objectives
 To ascertain the role of accounting rules and standard for a company.
 To detect the importance of valuable accounting policies and standard for Maybank
which support in preparing appropriate annual reports for various parties.
 To determine the consequences of non compliance of accounting standard
Questions
 What is the main role of accounting rules and standard for a company?
 What are the importance of valuable accounting policies and standard for Maybank
which support in preparing appropriate annual reports for various parties ?
 What happen in case if company do not follow appropriate accounting standards?
Problem statement
Is implementation of appropriate accounting standard while preparing annual statement
are helpful in decision making for different shareholder?
METHODOLOGY
Type of Investigation- Methods of research refer to processes which are mainly used to
gather information and data for effective business decisions. It is considered by systematic and

objective methods of searching for solution to problems that arise as a search for the knowledge.
There are two different research methods which are qualitative and quantitative (Fatima,
Abdullah and Sulaiman, 2015).
In order to perform this research quantitative approach is used because which provides
the suitable understanding about the facts and reality to the research topic. This method is also
supportive to extract large number of data in shorter period that saves times and cost.
Data collection- It is the process of gathering information on specific factors with the aim
of analysing the data. An investigator will be able to examine their hypotheses based on the data
and information collected. Types of data collection are of two different types, namely primary
and secondary. In respect to complete the particular research primary method is used to which is
effective in collecting the desirable information about the research topic. Researcher develop
appropriate question which are asked to specific audience in order to determine their
understanding and knowledge about particular topic. Moreover appropriate statistical test are
performed in order to detect the accuracy of gathered information so that crucial decision are
made for future effectiveness.

CHAPTER 2: LITERATURE REVIEW
Role of accounting rules and standard for a company
According to Muniandy and Ali, (2012) accounting rules and standards are regarded as
core and essential regulative framework for formation of effective fiscal reports as well as
sequent auditing of same (Muniandy, and Ali, 2012). Accounting rules are common guidelines
issued by relevant regulatory authority. Some guidelines may be compulsory to follow and
several may be just advisory. These rules contains some specific guidelines that assist accounting
personnel in reporting financial information. They are made available by means of a number of
important reports on the knowledge and reporting of special types of legal process, happenings
as well as other expenses. Accounting rules are designed to provide valuable information to
various users of financial statements, like stakeholders, lenders, borrowers, managers, investment
providers, suppliers, competitive companies, researchers, regulatory body. In reality, these
assertions are scheduled and recommended in order to enhance & baseline quality of fiscal
coverage. The rapid growth of global trade agreements trade agreements trade as well as the
internationalisation of enterprises, the introduction of latest communication technologies as well
as the emergence of international challenging forces are disrupting the fiscal environment to
large extent. In current global business circumstances, the locals of business community are in
serious want of common financial reporting language which should be used by all.
As per Salleh and Stewart, (2012) an international financial reporting structure is a
necessity to entice both overseas and current and current or future investors, which should be
accomplished through the harmonisation of accounting rules/standards (Salleh and Stewart,
2012). Accounting Standards refers to policy texts (unbiased statements for best financial
reporting practices) issued by specialist accounting authorities on various elements of
measurement, managing and confidentiality of accounting operations and concerns. As regards
the enactment of Malaysian GAAP, These are demonstrated as imperatives of accounting
reforms and trends, by codes or guidelines on how items that are to be drawn up in accounts
should be removed from accounts and described in annual reports of Maybank. The aim of
developing standards in context of Maybank is ensuring consistency in entire process of financial
reporting as well as to ensure quality and compatibility in information published by corporations.
MFRS include presentation, measurement, treatment, identification and disclosure elements of

accounting operations related to financial statements that are published policy documents
provided by a professional accounting officer or by government or other administrative
authority. Accounting rules / principles make it easy for stakeholders to analyses businesses
easily by evaluating their financial reports. If investors/stakeholders are divided among two
businesses in same field, investor can evaluate their corresponding statements to decide who is
performing a better way of generating sales and handling cash-flows. These also allows
corporations gain insight and transparency into own practices and results (Goh and Rasli, 2014).
In fact, these minimizes the possibility of inaccurate financial reporting through having multiple
monitors and safeguarding.
Importance of valuable accounting policies and standard for Maybank which support in
preparing appropriate annual reports for various parties:
As pet the views of Kasim, (2012) accounting policies relates to basic standards and
processes set in place by the governing staff of the corporation which are utilized to compile its
annual or periodic financial statements and reports (Kasim, 2012). They comprise all accounting
methods, assessment structures and disclosures. As in Malaysia for banking corporation, Central
Bank of Malaya (Bank Negara Tanah Melayu) form policies for banks with respect to
accounting, finance and other banking operations. This is the major regulating body which is
responsible for regulating banks and financial institutions like Maybank. Entities specially
banking corporations are usually expected to file their annual financial-statements in compliance
with Malaysian Financial Reporting Standards (MFRS) similar to IFRSs, except for independent
private entities which fail to comply with Private Entity Reporting Standards (PERS) for annual-
financial statements with periods starting before 1, Jan. 2016 and Malaysian Private Entities
Reporting Standard (MPERS-almost identical). Their primary goal is to maintain effective
transparency, reliability, credibility and comparability of financial reports and statements. They
do this by streamlining the nations economy's accounting practices and values(Haji, 2014).
Companies like Maybank are not permitted to manage and file their records as per their own
desires or preferences, or are unable to produce financial statements/reports for various groups
concerned. A large-scale global enterprise such as Maybank needs a solid infrastructure to meet
its clients’ expectations. One element is a powerful database developed by company that shares
‘best practice’ information with all its offices around the world. Client is also harnessing all
available technology to ensure any of their advisers can work with their clients anywhere in the

world, allowing them to be fully effective in serving the clients’ needs immediately. The same
would only be achieved if there is clear criteria for determining the practices are adopted within
Maybank. The all transactions of entities must then be reported in an uniform manner when they
comply with such issued accounting standards.
Mukhlisin, Hudaib and Azid, (2015) expressed views on this topic that Accounting is
commonly used as a specific language of business, because it expresses the actual financial
position of company to others (Mukhlisin, Hudaib and Azid, 2015). But as each language has
some syntax, as well as rules of grammar are same here. The key role in context of Maybank is
to increase the consistency and credit-ability of financial statements. Once financial statements
need to be produced in compliance with the guidelines, consumers will depend on them. As they
are aware that failure to comply with these requirements can have significant consequences for
businesses. Then there's comparability. Such criteria would enable for inter-firm as well as intra-
firm contrasts. This helps us to track the growth of product and its place in market. This also
aims to lay down a collection of accounting rules that involve the required reporting
requirements and assessment methods for different financial activities. Accounting standards
allow auditing personnel to fulfil their roles and duties. It simplifies the responsibilities and
making it simple for such personnel to fulfil roles. Accounting Practices have set out various
standards, laws and legislation to be followed by businesses in accounting procedures. These
rules and guidelines must be adopted by every organization. This controls the whole manner in
which financial requirements are planned and delivered. Therefore, if auditors believes that
entity has met with accounting standards and rules specified, they will easily check that all fiscal
practises are fair and accurate. Streamlining all accounting and financial information is crucial
role of accounting standards. This sets out standard guidelines for every fiscal and accounting
transaction. This eliminates all the uncertainty of accounting operation (Haron and Ibrahim,
2012).
Consequences of non Compliance of accounting standards:
According to Mohdali, Isa and Yusoff, (2014) Malaysia is very lucky that it have made
quantum leaps in process of convergence to IFRS (. Mohdali, Isa and Yusoff, 2014). Aside from
the disagreement with treatment of Islamic based banking and finance including its relationship
to measurements, disclosures and acknowledgements based on Syariah as well as MFRS
frameworks. Malaysia is quite stable and on right track to convergence to IFRS as there no major

problems of non-compliances with MFRS, this is also recognized that Malaysia has adopted as
well as over time developed effective national accounting and reporting policies, combined with
sufficient funding to as well as from MASB. Malaysia's educational system, theoretically is quite
much in compliance with current trends in accounting and corporate fraternity, so there's no
shortage of local ability in terms of educational and trainings, and bookkeepers in training are
quite well ready to join the job market to large extent (Hassan and Diallo, 2013). In Malaysia, for
banking corporation like Maybank it is required to follow accounting standards as the non-
compliance of accounting standard leads to penalties as specified. Also those banks which are
not following accounting standards comes in radar of regulatory authorities and auditing
personnels. Also in general public credibility or creditworthiness of bank also may decline as
non-compliance of accounting standards can reduce the relevancy of reported financial
statements for stakeholders and other interested parties. In order to make sure that reporting
entities in country are MFRS compliant, such entities should carry out a systematic, thorough
and accurate analysis of their corporation's readiness to comply with MFRS in order to prevent
any inquiry by authority owing to non-compliance after grace period for complete adoption.
As per Yusof, Ling and Wah, (2014) unless Malaysia winds up cutting its MFRS as
compatibility system that can be tailored to local requirements as well as not single size fits all
collection of standards, since full acceptance requires countries to sacrifice their sovereignty,
Country will have serious problems and will encounter difficulty to be accepted as a nation that
meets complete IFRS adoption (Yusof, Ling and Wah, 2014). The most concrete effect is that
when the company fails to follow new standards, it might be at risk of non-compliance as well as
competitors of bank can gain competitive advantages. Non compliance of accounting standards
is directly linked with its shareholder's trust. Also non compliance can result in legal proceedings
against bank. Further, for effective reporting of information and results is also good for bank's
personal growth. Non-compliance act as a direct message for shareholders and other stakeholders
like customers, lenders etc. that bank is hiding truth or there may be chances of fraud or
mismanagement. Accounting standards ensures that proper disclosures are made in financial
statements so users can easily understand the what is going on within Maybank but due to non-
compliances if bank not make adequate disclosures then it can hurt the sentiments of users of
financial statements. Further at global level non-compliances of IFRS or MFRS can also impact
the image of bank in global market-place. Thus it is duty of each corporation to follow

accounting standards appropriately and prevent all such direct and indirect consequences
(Siswantoro and Ibrahim, 2017).

CHAPTER 3: RESEARCH METHODOLOGY
The method for the gradual assessment used throughout the research is recognized as
survey methodology. RM is commonly defined as the essential component of several research
projects offering an adequate statutory and specific framework for the conducting of study.
Methodologically relevant and accurate actual facts can be used primarily to help answer
hypotheses or to explain why concerns are raised specifically in the analysis (Razak and
Mustapha, 2013). It acts as a roadmap for the prosecutor to draw a specific decision on a decided
problem for a study. Some important components of RM are discussed underneath:
Type of Investigation
Research methods apply to systems adopted primarily to obtain data and information in
order to make innovative business judgements. The quest for solutions to problems occurring in
the search for meaning is regarded through systematic and analytical means. To complete the
following research project quantitative method is implemented as it is helpful in delivering the
suitable understanding to all facts and figure relevant to particular research. The concept of
quantitative research is really the systematic way of gathering evidence to be pursued to obtain
more accurate results.
Research Approach
The systematic process which includes various theories and procedures for data
collection, interpretation and comprehension which are stated as research mechanism or
approach. Some of crucial techniques for study are inductive, abductive and deductive. In this
research approach of inductive reasoning is starts with hypothesis formulation and completing
testing for the successful results. This means researcher can take with a broad range of
possibilities. The assumptions they make from the evidence collected or a specific data series
are virtually unlimited. Inductive reasoning, though, offers researcher a reference point for
narrowing its conclusions and drawing a rational inference.
Research Philosophy
The accurate way of assessing collection of the scientific information is known as a
research philosophy by consideration of key sources, knowledge and understanding. The beliefs,
views, ideas and assumptions that are formed are those that are based on evidence to be gathered
or the information to be taken (Ng, Chong and Ismail, 2013). This describes the data related to a

particular event as well as the details obtained, analysed and is used to accomplish the study aim.
This particular study uses the theory of positivism, that actually accepts that perhaps the forces
and structures go further than reality and laws occur and are real. It notes some theory and any
certain methodology of science which can not be rejected by the scientific method.
Data collection
It is the process of gathering information on specific factors with the aim of analysing the
data. An investigator will be able to examine their hypotheses based on the data and information
collected. Types of data collection are of two different types, namely primary and secondary. In
respect to complete the particular research primary method is used to which is effective in
collecting the desirable information about the research topic. Researcher develop appropriate
question which are asked to specific audience in order to determine their understanding and
knowledge about particular topic. Moreover appropriate statistical test are performed in order to
detect the accuracy of gathered information so that crucial decision are made for future
effectiveness (Mohamed and Daud, 2012).
Sampling
In general, sampling may be defined as gathering some sections of the sample from broad
population and making results based on their responses in the context of study needs. Moreover,
researcher used to make the assumption that weather people are aware or not about the research
topic from the understanding and response of selected people. In the semi-probability screening
process, samples are collected in this kind of way that some people are randomly selected as a
part of investigation which are further support in making valuable decision. In respect to
complete the particular research 30 respondent are selected randomly those are working for
different job position in Maybank. This help in defining the correct information about the
understanding and use accounting standard while preparing annual statement.
Data analysis
The most important part of a detailed research is to promote the use of mathematical
instruments and procedures in order to assess and explain the information gathered. This
approach should be used in the framework of analysis to provide the correct interpretation for
relevant content. In addition, quantitative method of collecting data is effective in ascertaining

the in-depth knowledge of selected candidate relevance to research topic. Qualitative data
analysis is also effective in determining the theoretical concept which ease the understanding of
accounting rules and regulation that are valuable in preparing statement.
Ethical consideration
For the researcher, ethical considerations are important when studying principles of ethics
to support better outcomes. Ethics must improve the thesis to discourage participants from
promoting unethical behaviour (Lahsasna, 2014). When focusing at morality, the speaker cannot
provide the viewer with misleading facts that improves the integrity and sense of research. All
the participants are kept safe and protected by the investigator in existing research so each
participant is helpful for the research projects. All data necessary to lead to analysis must be
preserved secure and avoid abuse and exploitation in the light of the study topic.