From 1st January 2006, reporting entities in Malaysia are require to prepared their financial statements in accordance with the adopted new and improved Financial Reporting Standards. This study seeks to survey the impact of the adoption of FRS on public listed companies. It also looked at implementation issues faced during the transition period by these companies. A total of 888 questionnaires were sent through the mail to the companies listed on the Main and Second Board of Bursa Malaysia. To complement the questionnaires, interviews were also conducted with representatives from the audit firm and regulatory bodies in the Klang Valley. After much effort has been made to collect back the questionnaires, only 67 were received and a total of 7 interviews conducted. These data were used in the analysis to arrive at the findings. The findings revealed that only 71.6% of the companies had adopted fully FRS beginning 2006. The biggest drawback in the implementation process was the lack of briefing to financial analysts and investors on the impact of FRS on the company’s financial statements. As for the most difficult standard to apply, 82.1% agreed that it was FRS 139 with 68.7% stating that it was FRS 2. A survey of the first and second quarter interim reports 2006 of Malaysian Top 30 Companies was also conducted vie the internet. The Finding revealed that the standard which has the highest impact on the group’s accounting policies is FRS 101(57%) followed by FRS (46%). The standard with the least impact were FRS 119 and FRS 131. The results of this study were subject to several limitations. The main limitation is the poor response rate. Further researchers could perhaps, make use of annual reports to study the impact of specific FRS on the reported earnings of companies.
Research Team :
• Tan Lay Leng
Institute :
UiTM