Compulsory charity for Muslim (if their wealth exceeds the condition (nisab), equal to 85 grams of gold and held for a year (Haul)).

Purpose The purpose of this study is to present and test a conceptual framework that describes the Islamic religiosity parameters of riba, zakat and mafsadah and their influence on the adoption of firms’ corporate social responsibility (CSR) practices. Design/methodology/approach The study applied structural equation modelling to empirically test the proposed model on a sample of 109 Pakistan Stock Exchange (PSX) listed firms. Findings The study finds that the Islamic religiosity parameters of riba and mafsadah have a positive influence on the adoption of CSR practices, thus confirming the two study hypotheses. However, the authors did not find any significant influence of the zakat parameter on the adoption of firms’ CSR practices. Research limitations/implications This study is limited to the Islamic religious concept and only surveyed one stakeholder group, i.e. firms’ managers in the Pakistani context. The authors recommend that future studies should look beyond a single religion with the inclusion of multiple stakeholders in a cross-country setting. Practical implications The findings possess important policy implication for regulators, stakeholders and practitioners, as the authors demonstrate that different parameters of religiosity are related to CSR practices and these parameters can be used as a substitute for and complement legal institutions in promoting and developing CSR practices. Social implications The stakeholders’ particular investors and other market participants should be aware of the degree of religiousness and the CSR nexus, as surveyed manger responses in PSX listed firms indicate that better religious firms seem to place more emphasis on social responsibility obligations. Originality/value This study is among few studies that propose a comprehensive conceptual Islamic religiosity framework to evaluate the influence of a firm’s Islamic religiosity on CSR best practices. It differs from the past studies that were either on Islamic financial institutes or examined the religious influence on a firm’s economic behaviours.

The aim of this research is to identify the determinants and consequences of interlocking board membership in New Zealand and whether this interlocking affects the firm performance. This research used a sample of 276 firm years and 1,783 directors from New Zealand listed companies. A twofold approach analysing the overlap of directors' names, boards, and company levels was used. This research finds that New Zealand firms are highly interlocked. While concentrated ownership firms react negatively to interlocking, this research finds that interlocking is negatively impacting firm performance in New Zealand. This research also finds that New Zealand firms were significantly interlocked under both approaches, which resulted in negative firm performance. This study has wide application to the New Zealand Financial Market Authority and Institute of Directors New Zealand to evidence the possible effects of directors of being involved ("busy") in more than one company at the same time. This is the first paper on firm and board interlocking based on New Zealand stock exchange data following the corporate governance best practice code 2004 regime which identified both the determinants and consequences of interlocking.

Purpose This study aims to explore the role of corporate governance (CG) characteristics on the financial performance of large agricultural companies in New Zealand. External auditor remuneration and board characteristics, such as board ownership, board compensation, board independence and board gender diversity, are addressed in the context of New Zealand’s agricultural companies by applying agency theory. Design/methodology/approach This paper uses a balanced panel data generalised least square regression analysis on 80 firm-years of observations over the period from 2012 to 2015. Findings Empirical analysis revealed that external auditors’ remuneration and board characteristics, such as board compensation and board independence, except for board ownership and board gender diversity, held no association with the agricultural companies’ performance. While board ownership and board gender diversity were negatively, but significantly, associated with firm performance, these results were pronounced in the listed agricultural companies rather than in the non-listed companies. Research limitations/implications This study encountered limitations commonly associated with the majority of industry-specific studies, i.e. small sample size and lack of published financial information from databases. Therefore, for generalisation, these limitations were considered relevant. Practical implications The results of this research project are beneficial for authorities and agricultural company directors in implementing CG principles and guidelines to empower such companies in international competition. Encouraging agricultural companies to maintain a high level of transparency in financial reporting is of central interest for the government’s economic development, and stock market investors achieve a high level of transparency in non-financial disclosures, the chief objective of this study. Finally, the results of this paper may encourage auditors to scrutinise CG disclosures by agricultural companies in more detail, looking for undisclosed information. Social implications The results of this paper may encourage managerial transparency by providing appropriate disclosures for the public benefit. Investors may benefit from the disclosure provided in their economic decision-making and the public may expand on the information disclosed in facilitating development through exports, expansion of foreign investments and the indigenous economy. Originality/value The findings contribute to the literature by providing novel and original insights into using a sample of listed and non-listed agricultural companies to extend the current understanding of the governance-performance nexus.

Purpose Organisational cynicism (OC) is a growing trend in contemporary organisations. However, its impact on employee performance (EP) remains understudied. The purpose of this paper is to address this gap by investigating its effect on EP. The study also investigates the moderating effect of employee engagement (EE) on the relationship between OC and EP. Design/methodology/approach Primary data are collected through questionnaire from employees (N=200) of various health organisations in Pakistan by employing a convenient sampling technique. Hierarchical multiple regression is employed by using SPSS. Findings The findings of correlation and regression analyses reveal that OC has significant negative relationship with EP. Hence, the patient care is compromised in sampled organisations due to poorer performance of employees. Moreover, findings also reveal that EE has a moderating effect on relationship between OC and EP. Therefore, hospital management needs to increase EE to reduce the cynicism and improve performance. In addition, organisations and managers need to consider their role and actions creating the conditions that lead to cynicism among employees and should take trustworthy steps to increase employee retention and engagement and, ultimately, their performance. Moreover, the findings of the study indicate that the majority of respondents are not happy with their organisations. They also feel that the organisation is not fulfilling its promises and betraying them in several ways. This breach of contract becomes the reason for OC among employees and badly affects their performance. Most of respondents give importance to their career development and the findings reveal that organisations are not focussing on career development of their employees. Research limitations/implications The study has some limitations and implications. The organisational culture can mitigate the negative effect of OC and enhance performance by promoting EE. It is recommended that employee cynicism can be reduced by providing a supportive environment, EE and fairness. Nevertheless, the findings of this study still help supervisors to inhibit this harmful effect by reducing the level of psychological contract violation and organisational politics that will reduce the level of cynicism among employees and improve their performance. Practical implications It is found that OC has a major impact on the behaviour and attitude of employees, supervisors and representatives on the one hand and, ultimately, the organisation, on the other hand. These effects have specific susceptibilities due to the vicinity of the employees. It is recommended that employee cynicism can be reduced by providing a supportive environment. Social implications The study also helps psychologists to understand employees’ attitudes and improve personnel selection to ensure they recruit the right people. Leaders need to communicate honestly, effectively and frequently to address cynicism in order to ensure ample staffing and resource levels that result in good patient care and positive work attitudes at hospitals. Originality/value According to the researchers’ best knowledge, only few studies tried to investigate the relationship between organisational cynicism and EP by employing the moderating effect of EE. Therefore, it will be a good contribution in existing literature to understand consequences of cynicisms.

Purpose This paper aims to examine the existence of related party transactions (RPTs) in failed financial companies in New Zealand when firms have interlocking directors on the board. We also examine the role of auditors in the review of RPTs. We anticipate that inter-company director relationships promote RPTs, while reputable large auditors (i.e. Big4) restrict the practice. Design/methodology/approach This study uses multivariate analysis to examine the determinants of RPTs. We use an unique, hand-collected database of New Zealand finance companies all of which collapsed during the years 2006-2011. Findings Using a sample of 65 firms (including 38 failed finance firms) and 219 firm-year observations, we found that almost half of the failed finance firms were engaged in RPTs. For the failed firms, those that were engaged in RPTs were mostly represented by interlocking directors and were audited by non-Big4 auditors, implying lower monitoring quality may facilitate RPTs. Using a sub-sample, we also found evidence that firms engaged in RPTs were later convicted of questionable accounting and disclosure practices. Practical implications This research is beneficial to regulators and audit professionals in understanding the potential for adverse outcomes associated with interlocking directors and undisclosed RPTs. While interlocking directors could enrich the external connections of a firm which might facilitate capital resourcing, this study suggests regulators might encourage firms to disclose RPTs when the firm has higher interlocked directors. Originality/value This study is the first to examine the association between RPTs and interlocking directors using a sample of failed finance companies. RPTs and lack of disclosure were widely attributed with being the determinants of corporate failure in the finance sector. However, failed finance firms remain widely under-researched because of a lack of available data. This study circumvent this limitation by using print media and business news portals to collate information on RPTs and interlocking directors. While prior research indicates that weak corporate governance leads to poor accounting practice, using the interlocking board as a proxy for weak corporate governance, this study is the first to substantiate the adverse effect of interlocking boards and undisclosed RPTs with corporate failure.

The purpose of this paper is to investigate the effect of better compliance with corporate governance regulation on managerial accruals (discretionary accruals) in New Zealand listed companies. Unlike previous research of earnings management, Jones model (Jones 1991), Modified Jones model and Performance Matched Accruals Model (Kothari, Leone, & Wasley, 2005) this research focuses on free cash flow as a measure of discretionary accruals instead of cash flow from operating activities. Univariate and multivariate regression analysis was done on 70 New Zealand listed firms over the period of 2000 -2007 (inclusive). Results found that better compliance with corporate governance reduces discretionary accruals implying lower managerial opportunistic behaviour. Consistent with existing theories and models of discretionary accruals, this research documents that free cash flow increase managerial discretion by comparing with commonly used accruals model such as Jones Model, Modified Jones Model and Performance Matched Accruals Model. This study provides insights to regulators in developing corporate governance and financial reporting guidelines. It suggests that 'Comply or Explain' form of soft regulation reduces managerial discretion with stock exchange listing. This research uses a comparative analysis of traditional discretionary accrual measure with free cash flow approach of discretionary accruals. Moreover, an integration approach of discretionary accrual measure was never done in New Zealand. AbstractThe purpose of this paper is to investigate the effect of better compliance with corporate governance regulation on managerial accruals (discretionary accruals) in New Zealand listed companies. Unlike previous research of earnings management, Jones model (Jones 1991), Modified Jones model and Performance Matched Accruals Model (Kothari, Leone, & Wasley, 2005) this research focuses on free cash flow as a measure of discretionary accruals instead of cash flow from operating activities. Univariate and multivariate regression analysis was done on 70 New Zealand listed firms over the period of 2000 -2007 (inclusive). Results found that better compliance with corporate governance reduces discretionary accruals implying lower managerial opportunistic behaviour. Consistent with existing theories and models of discretionary accruals, this research documents that free cash flow increase managerial discretion by comparing with commonly used accruals model such as Jones Model, Modified Jones Model and Performance Matched Accruals Model. This study provides insights to regulators in developing corporate governance and financial reporting guidelines. It suggests that 'Comply or Explain' form of soft regulation reduces managerial discretion with stock exchange listing. This research uses a comparative analysis of traditional discretionary accrual measure with free cash flow approach of discretionary accruals. Moreover, an integration approach of discretionary accrual measure was never done in New Zealand. 3

The failures of corporations such as Enron, WorldCom and HIH Insurance, to name but a few, have heightened investor awareness of the need to not only evaluate company performance, but also to consider the possibility that financial statements may not be a true reflection of company results, as fraudulent activities may have occurred during the reporting period. Since parties who are outside of the firm do not have access to pertinent information, they have to rely upon published financial and non-financial data to form an opinion regarding performance and/or the risk that fraudulent activities may have occurred. The prior literature shows a relationship between weak corporate governance and fraudulent activities, although most if not all of this research relates to Western economies. The differences in institutional setting e.g. cultural values and legal environment in Malaysia would not give the same findings with the study in western economies. Composing of many ethnicities, Malaysia is a multicultural country. With each ethnic group upholding its own culture, values and belief, businesses are conducted according to each ethnic’s culture. The results of this study could shed some light on the influence of institutional setting regarding corporate governance. Companies that were charged with accounting and auditing offences from year 2003 to 2007 were selected as the fraudulent samples. Data was collected from the years these companies were charged with fraud and the year prior to that. Logistic regression analysis was carried out to determine the significant differences between fraudulent and non-fraudulent companies with respect to corporate governance characteristics. The results indicated that the size of the board and the percentage of institutional shareholdings had significant relationships with the likelihood of corporate fraud occurrences consistently across the two-year period studied. The results of this study will assist public, corporate and accounting policy makers in formulating more effective corporate governance mechanisms.