Qualified Audit Reports of Local Authorities in the Northern States of Malaysia

Authors

  • Mohammad Azhar Ibrahim Faculty of Accountancy, Universiti Utara Malaysia, Malaysia
  • Engku Ismail Engku Ali Faculty of Accountancy Universiti Utara Malaysia, Malaysia
  • Syed Soffian Syed Ismail Faculty of Accountancy Universiti Utara Malaysia, Malaysia
  • Zainol Bidin Faculty of Accountancy Universiti Utara Malaysia, Malaysia

DOI:

https://doi.org/10.32890/mmj2004.8.2.6

Keywords:

Local authorities, financial reporting, accountability, audit incidents

Abstract

The reliability of information presented in the financial reports of local authorities is of utmost importance to enable the public to measure their performance in terms of efficiency and effectiveness in using public resources. The task to provide such an assurance lies with the Auditor General, who has been entrusted to enforce the auditing compliance regulations. A certificate in the form of “unqualified,†“qualified,†“adverse,†or “disclaimer†accompanied by a report on the financial affairs of the local authorities concerned will be issued after the Auditor General completes the audit of the local authorities’ financial statements. Our study on 14 local authorities comprising municipal and district councils in the Malaysian States of Perlis, Kedah and Penang found that the Qualified Certificate is the common type of audit certificate issued to the local authorities concerned during the period 1997-2001(inclusive of both years). Discrepancies in “Fixed Assets Register†ranked first among the audit incidents that led towards non-compliance to the audit procedures. This was followed by discrepancies in “Other Receivables†and “Cash Flow Statements†which ranked second and third positions respectively. Our finding also shows that size does not grant any advantage to the bigger local authority in reducing the number of audit incidents.

 

Downloads

Download data is not yet available.

References

Asmah, A. A. & Emelin, A. W. (2004). Audit Certificates of selected local authorities in Malaysia: A glimpse of its audit Malaysian Management Journal 8 (2), 77-86 (2004) http://mmj.uum.edu.my incidents. Paper presented at the national conference on accounting and finance (NCAF) 2004, 23-24 August 2004, Segamat, Johor.

Boyne, G. & Law, J. (1991). Accountability and local authority annual reports: The case of Welsh District Councils. Financial Accountability & Management, 7(4), 179-194.

Davison, R. M. (2000). Professional ethics in information system; a personal view, Communications of the AIS, 3(8).

Emelin, A.W. & Asmah, A. A. (2002). Quality of financial reports of local authorities in Malaysia. Paper presented at the conference on financial reporting, 29-30 October 2002, Shah Alam, Selangor.

Harris, A. W. (1997). The NSW Public Sector: Towards more effective governance of government businesses. Paper presented at the Corporate Governance, Risk Management and Internal Control

Conference, Australia on 29 May 1997.

Higson, A. (1996). Corporate communication: A conceptual framework for financial reporting. Retrieved February 14 2000 from http://les.man.ac.uk/acpa96/txt/ higson.txt (Access date: 14/2/2000)

Hyndman, N. S. & Anderson, R. (1995). The use of performance information in external reporting: An empirical study of UK executive agencies; Financial Accountability & Management, 11(1), February.

Ishak, T. (1989). Accoutability in public financial management (Akauntabiliti Dalam Pengurusan Kewangan Awam, Pengurusan Awam), Vol. 1, No. 2, Mei, pp. 39-49.

Kidwell, L. A. (1999). Compliance reporting decisions in municipal audits: The impact of budget variance and employment sector. Journal of Public Budgeting, Accounting and Financial Management, 11(3), 325-356.

Mahamad, T. (1998). The determinants of assessment tax collection: The Malaysian local authority experience. Unpublished PhD dissertation, University of Glamorgan. Malaysian Approved Standards on Auditing, Malaysian Institute of Accountants, May 2001, Kuala Lumpur. Ministry of Housing and Local Government (n. d). Statistics. Retrieved from http://www.kpkt.gov.my

Nailah, S. (2001). Management and auditing of local authority: Towards better accountability and transparency. Paper presented at the International Forum On State And Local Governments Accounting And Reporting, 22-24 July 2001.

Nichol, E. O. & Taylor, D. W. (2001). Accountability and performance reporting in the public accounts of the Malaysian Government. Paper presented at the International Forum On State And Local Governments Accounting And Reporting, 22-24 July 2001.

Patton, J. M. (1992). Accountability and governmental financial reporting. Financial Accountability and Management, 8(3), 165-180.

Radiah, O., Jamaliah, S. & Noraini, M.N. (2001). Internet reporting by local authorities in Malaysia. Paper presented at the International Forum On State And Local Governments Accounting And Reporting, 22-24 July 2001. Malaysian Management Journal 8 (2), 77-86 (2004) http://mmj.uum.edu.my Syed Soffian, S. I., Engku Ismail, E. A., Shamharir,

A. & Ayoib, C.A. (2002). The determinants of financial reporting lag (FRL): The case of local governments in the state of Kedah. Malaysian Management Journal 8 (2), 77-86 (2004)

Downloads

Published

31-12-2004

Issue

Vol. 8 No. 2 (2004): Malaysian Management Journal (MMJ) Vol. 8 No. 2 December 2004

Section

Articles

How to Cite

Ibrahim, M. A., Engku Ali, E. I., Syed Ismail, S. S., & Bidin, Z. (2004). Qualified Audit Reports of Local Authorities in the Northern States of Malaysia. Malaysian Management Journal, 8(2), 77-86. https://doi.org/10.32890/mmj2004.8.2.6

Research impact

Harvested 2026-09-07
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/mmj2004.8.2.6

Most read articles by the same author(s)