Papers by Naimat Ullah Khan
Indian Journal of Corporate Governance, 2018
Stewardship theory of corporate governance is a normative alternative to agency theory. This arti... more Stewardship theory of corporate governance is a normative alternative to agency theory. This article argues that the stewardship behaviour of managers results in exemplary corporate governance practices when the espoused values of the firm are aligned with the enacted values. The case study method is used to prove this argument by studying corporate governance practices in a family-owned business group in India. The Murugappa Group is a 100-year-old family-owned business group, known for their ethical practices and currently managed by the fourth-generation family members, without undergoing any split. The espoused as well enacted values of the group are studied and corporate governance practices of the group firms analysed in this article. The article focuses on the governance structure of the group, its succession planning practices and the ownership structure. The analysis indicates that aligning the enacted values with the espoused value helped the group to adapt itself to the c...
Journal of Accounting in Emerging Economies
PurposeFinancial shenanigans are the omissions or actions undertaken with the purpose of misrepre... more PurposeFinancial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour emerging in the context of a desire to deceive the users of financial reports. In this context, research has illustrated how investors can find themselves impacted by such behaviour, with incorrect decision-making around investment decisions being a major issue. However, auditors' perspectives, of obvious importance in such scenarios, given these individuals' role in attesting to the veracity of financial disclosures, have not been investigated. The aim of this study is to address this gap by seeking the experiences of auditors in the developing nation of Pakistan, an environment in which the significant impact of financial improprieties is well-documented.Design/methodology/approachInterviews with 50 Pakistani-based auditors were conducted to gather perceptions about the nature and prev...
Qualitative Research in Financial Markets, 2022
Purpose – This paper aims to explore corporate governance (CG) and succession planning in family-... more Purpose – This paper aims to explore corporate governance (CG) and succession planning in family-owned
businesses in the United Arab Emirates (UAE).
Design/methodology/approach – Semi-structured interviews are conducted with 16 owners and heirs of
UAE family businesses. The interviews – face-to-face and asynchronous electronic – are conducted instead of a
questionnaire to get an in-depth analysis of the topic in the context of both medium- and large-sized family businesses.
Findings – The responses are mixed with regard to governance challenges (duality, gender, internal control,
transparency, etc.). The majority of the interviewees indicate that succession planning remains one of the biggest
challenges for family businesses in the UAE. Fifteen of the sixteen interviewees document that a sound succession
strategy must be in place to ensure the continuity of the business and prevent future disputes among potential
successors. Similarly, the respondents also emphasise the importance of transparency and accountability for the
sustainability of family businesses. The sustainability of family businesses relies on many aspects, such as national
regulations, corporate systems and the succession process. Finally, most of the respondents from medium-sized
companies opined that incorporating CG is a time-consuming and expensive process.
Practical implications – The interviewees supported stewardship theory in case family members are
occupying positions on the board as they have more long-term commitment and a greater sense of belonging to the
business (socio-emotional wealth) compared to non-family members. The interviewees acknowledge that the lack of
professionalism and conflicts of interest among family members can be offset by recruiting non-family members.
Originality/value – Family businesses are particularly significant in the Arab world as they account for
over 60% of gross domestic product (GDP) and use above 80% of the workforce which make them interesting
research subject. In addition, this paper explores the CG challenges faced by both large- and medium-sized
family businesses in the UAE within the theoretical framework of stewardship theory.
Journal of Accounting in Emerging Economies, 2022
Purpose
Financial shenanigans are the omissions or actions undertaken with the purpose of misrepr... more Purpose
Financial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour emerging in the context of a desire to deceive the users of financial reports. In this context, research has illustrated how investors can find themselves impacted by such behaviour, with incorrect decision-making around investment decisions being a major issue. However, auditors' perspectives, of obvious importance in such scenarios, given these individuals' role in attesting to the veracity of financial disclosures, have not been investigated. The aim of this study is to address this gap by seeking the experiences of auditors in the developing nation of Pakistan, an environment in which the significant impact of financial improprieties is well-documented.
Design/methodology/approach
Interviews with 50 Pakistani-based auditors were conducted to gather perceptions about the nature and prevalence of financial shenanigans. The questions posed were structured to address issues relating to both the drivers of and methods used to operationalise financial malfeasance.
Findings
The views expressed by the participants suggest that this type of malpractice is common, with a variety of forms employed and a level of audacity and shamelessness is striking. The results indicate the absence of the three institutional pillars conventionally associated with motivating organisational attempts to legitimise behaviour and maintain social contracts. When considered alongside recent findings that the audit profession in Pakistan may not always play an effective monitoring role, we argue that the evidence suggests the existence of motivations for legitimising strategies are not yet fully understood.
Research limitations/implications
This contention helps address recent calls for investigation of issues around legitimising tendencies where theoretical understanding is incomplete. A full understanding of the embedded practices will provide capital providers with the opportunity to make more informed decisions regarding their investments in Pakistani firms by highlighting the financial shenanigans involved, including the sheer audacity apparently associated with the observed behaviour.
Originality/value
Earnings management and auditing have not been studied widely in Pakistan despite the abundant and persistent nature of corporate scandals across the nation for many decades. Whilst implementation (and enforcement) of some accounting and auditing standards have taken place recently, the financial collapses continue, and understanding regarding the on-going fraud is urgently needed. The extent and shameless nature of the perceived behaviour are striking, suggesting that those closest to financial reporting in Pakistan see fraudulent financial reporting as being close to, if not yet fully representative of, normal practice.
Qualitative Research in Financial Markets, 2017
Purpose The aim of this study is to examine the perceptions of consumers on Islamic banking and f... more Purpose The aim of this study is to examine the perceptions of consumers on Islamic banking and finance in Pakistan. Islamic finance is an emerging phenomenon, and its survival depends on the availability, affordability and awareness. This paper attempts to fill the gap in the literature by exploring the perceptions of consumers and bankers in an attempt to gain insights so that the availability of products and awareness can be increased. Design/methodology/approach The study uses a regression model by using perception as a dependent variable and awareness, knowledge and religious motivation as independent variables. Primary data is collected using 150 questionnaires distributed amongst finance students in several universities and employees of Islamic banks in the Khyber Pakhtunkhwa (KPK) Province of Pakistan. Findings The findings reveal that overall consumers’ perception is positive about Islamic banking and finance in Pakistan. Statistical analysis shows that awareness, knowledge...
Afro-Asian J. of Finance and Accounting, 2020
This paper analyses herding behaviour in the Pakistan stock exchange (PSX, formerly known as Kara... more This paper analyses herding behaviour in the Pakistan stock exchange (PSX, formerly known as Karachi stock exchange, KSE) for a sample of 663 firms over a period of 13 years, from 2004 to 2017. For detecting herding behaviour, two dependent variables are used, i.e., cross-sectional standard deviation (CSSD) of Christie and Huang (1995) and cross-sectional absolute deviation (CSAD) of Chang et al. (2000). The results show no herding behaviour on the basis of both methods at different levels of market movements. The absence of the herding behaviour may be because these firms belong to different sectors which may follow their respective industry portfolios but not the overall market; for example, Shah et al. (2017) documented that firms in several industries herd toward their industry portfolios for Pakistani data. Future research can be done using a primary data collection method from investors about their opinion on herding behaviour.
Afro-Asian J. of Finance and Accounting, 2016
Journal of Accounting and Management Information Systems (JAMIS), 2021
Research Question: Does the introduction of Key Audit Matters (KAMs) increase audit quality and r... more Research Question: Does the introduction of Key Audit Matters (KAMs) increase audit quality and reduce agency cost associated with it? Does the introduction of KAMs decrease Earnings Management (EM) and agency cost associated with it? Motivation: There have been many studies in the past few years testing the impact of KAMs on the quality of the audit and EM in the developed economies like the United States and United Kingdom, however very few studies exist in the context of the UAE. Moreover, many studies on this topic uses quantitative techniques whereas this study employs qualitative method of interview to judge the perception of auditors about the audit quality and EM in the UAE after the introduction of KAMs. Idea: The research seeks the perception of auditors about the quality of audit and EM after the introduction of communicating KAMs in the UAE. Vol. 20, No. 2 of stringent audit regulatory body lead to effect the overall quality of the audit. The government should implement ...
Journal of Accounting and Finance in Emerging Economies
This study examines market efficiency in the light of the simple moving average technical trading... more This study examines market efficiency in the light of the simple moving average technical trading rules on daily closing share prices of 100 companies listed on Pakistan Stock Exchange over ten years from 2006 to 2015. The results show strong support for simple moving average rules having both predictability and profitability for PSX. It refers that the returns from these rules are not same as investors earn from a naïve buy and hold strategy. The uses of these simple moving average rules produce abnormal returns to investors and hence nullify the weak form of efficiency on PSX.
Asia-Pacific Journal of Financial Studies , 2021
We investigate whether crosscountry differences in the legal system influence demand-side credit ... more We investigate whether crosscountry differences in the legal system influence demand-side credit constraints. We explore the notion of discouraged borrowersfirms that choose not to apply for bank credit because they anticipate rejection. Employing survey data from 46 economies, we find that rapid and less costly court proceedings, lower procedural complexity in court processes, and higher recovery rates under bankruptcy lead to the lower likelihood of borrower discouragement. These results are more pronounced in countries with strong creditor protections in relation to company reorganization and liquidation. The results corroborate the supply-side view that strong creditor rights and their efficient enforceability alleviate banks' participation constraints in the loan market, thereby encouraging small and medium-sized enterprises to apply for credit in the first place. We also find that differences in institutional settings, such as higher regulatory quality, better control of corruption, and the rule of law, lead to lower rates of credit self-rationing in the loan market.
National Finance Commission (NFC), 2019
National Finance Commission (NFC) award is an arrangement for distribution of financial resources... more National Finance Commission (NFC) award is an arrangement for distribution of financial resources among federating units of Pakistan. The federal government has two sources of revenue i.e., tax income and non-tax income. The tax income is the divisible part under the NFC award. First, vertical distribution of divisible pool is decided between the federal government and four provinces i.e., Baluchistan, Khyber Pakhtunkhwa (KP), Sindh, and Punjab. Subsequently horizontal distribution among the provinces takes place. The current arrangement under the 7 th NFC award is such that out of gross divisible income, the first 1% goes to KP as reconstruction relief due to 'War on Terror', and 0.66% goes to Sindh as compensation for abolishment of Octrio and Zila Tax in 1997; afterwards 57.5% goes to four provinces and the remaining income comes under the domain of federal government. The federal government pays for its obligations under its domain including debt servicing, defense, salaries and pension of federal employees and development and non-development funds to three territories of Azad Jammu Kashmir (AJK), Gilgit-Baltistan (GB), and erstwhile Federally Administrated Tribal area (FATA). It is important to note that there is defined formula to distribute the 57.5% revenue only among four provinces, not for the territories of AJK and GB. Moreover, Clause 3(A) of Article 160 of the Constitution says that the share of provinces in the new NFC award will not be less than prescribed share in the previous Award (i.e., 57.5%). The paper addresses the question that after the merger of FATA with KP, what percentage of divisible income should be assigned to GB and AJK? Currently, the distribution of resources to AJK and GB is on adhoc basis and at the discretion of federal government since these territories are not permanent members of NFC award. The findings of the research suggests two tiers solution to this issue based on the principle of 'inclusiveness' instead of 'othering'. First, there should be constitutional amendments to provide permanent membership to AJK and GB in the award while bringing them in 'fiscal federalism' without 'political federalism'. Second, both territories should be accommodated in horizontal formula of distribution of NFC award while increasing the proportional ratio in vertical distribution of 57.5% followed by measures for fiscal equalization and adjustment.
The Journal of Humanities and Social Sciences, 2018
This study examines the views of accounting professionals (university graduates) about the Accoun... more This study examines the views of accounting professionals (university graduates) about the Accounting education in Pakistan. The study investigates problems, causes and suggestions for future improvements in the accounting education of Pakistan. The analysis is done through thematic analysis of the semi-structured interviews with 50 accounting professionals in various sectors of Pakistan's labor market. The interview method is employed to have a detailed and in-depth discussion with the practitioners about the subject matter. The research identifies three major problems of accounting education in Pakistan i.e., deficiency of skills, gap between theory and practice, and non-completion of accounting courses during their classes. The respondents provided suggestions to fix these problems through different means, such as the revision of curriculum, provision of internships for students, introduction of accounting software, arrangement of training workshops for teachers as well as students, and compliance from Higher Education Commission (HEC) of Pakistan for standardization and harmonization of accounting education in various universities. The findings can be used by different stakeholders (including Universities, accounting firms and the HEC) to improve the standard of accounting education in Pakistan.
Afro-Asian J. of Finance and Accounting (AAJFA), 2020
This paper analyses herding behaviour in the Pakistan stock exchange (PSX, formerly known as Kara... more This paper analyses herding behaviour in the Pakistan stock exchange (PSX, formerly known as Karachi stock exchange, KSE) for a sample of 663 firms over a period of 13 years, from 2004 to 2017. For detecting herding behaviour, two dependent variables are used, i.e., cross-sectional standard deviation (CSSD) of Christie and Huang (1995) and cross-sectional absolute deviation (CSAD) of Chang et al. (2000). The results show no herding behaviour on the basis of both methods at different levels of market movements. The absence of the herding behaviour may be because these firms belong to different sectors which may follow their respective industry portfolios but not the overall market; for example, Shah et al. (2017) documented that firms in several industries herd toward their industry portfolios for Pakistani data. Future research can be done using a primary data collection method from investors about their opinion on herding behaviour.
CITY UNIVERSITY RESEARCH JOURNAL , 2019
This paper investigates the impact of futures contracts (FC) on volatility of stock prices using ... more This paper investigates the impact of futures contracts (FC) on volatility of stock prices using firm-level data of Pakistan-Stock-Exchange (PSX) from 1999 to 2015. GARCH model is used in this paper to examine initiation of FC on volatility. The results propose that after the initiation of FC, the stock price volatility of 17 companies stabilizes, whereas the stock price volatility of four companies destabilizes and for the seven companies it does not change. Hence, on average, the findings support the stabilization hypothesis which asserts that introduction of derivatives stabilizes the market. The finding supports the theories that derivative securities expand investors' choices for investment. The results of the study encourage the investors to invest in derivatives and the regulators should encourage derivatives market as it stabilizes the volatility.
PUTAJ – Humanities and Social Sciences, 2018
This paper investigates the conditional association between betas and returns in sample of 206 fi... more This paper investigates the conditional association between betas and returns in sample of 206 firms listed on the Pakistan Stock Exchange (PSX). The results of this study show that the relationship between betas and stock returns is flat when tested unconditionally. However, when the data is split between up and down-market weeks, then there exists a conditional relationship between risk and returns. The results support the view that beta is still a valid tool for risk measurement in an emerging market of Pakistan. This paper tests the robustness of the results by including several other measures of total and unsystematic risk such as variance, skewness, kurtosis and standard error alongside beta in the conditional CAPM regressions. These additional tests do not change our main conclusion.
Al-Idah 36 (Issue-II) , 2018
A comparison of the Islamic Banking products offered in the two
countries of Pakistan and Malaysi... more A comparison of the Islamic Banking products offered in the two
countries of Pakistan and Malaysia has been discussed in this
paper. The research paper uses document analysis to identify
different products offered by five full-fledged Islamic banks in
Malaysia and Pakistan. It is evident from the research that Islamic
banking sector in Pakistan is not tapping its full growth potential
as in case of Malaysia. It is also concluded that the trade financing
and asset financing products offered by Islamic banks in Malaysia
are more diverse than the products offered by its counterparts in
Pakistan. The paper gives insight to the Shariah complaint board
to introduce new products while learning from the experience of
other countries. This research does not focus on investigating the
reasons behind these differences; however, it initiates a discourse
in this direction.
This study investigates Islamic calendar anomalies in Pakistan Stock Exchange (PSX), using KSE-10... more This study investigates Islamic calendar anomalies in Pakistan Stock Exchange (PSX), using KSE-100 Index data over the period 1991-2014. The findings show significant volatility of stock returns during Islamic months of Safar, Rabbi-ul-Awwal and Zil-hajj. However, there is no evidence of abnormal returns in any Islamic month. These findings do not provide a compelling evidence of Islamic calendar anomalies in Pakistani market.
This paper particularly addresses the impact of mergers and acquisition (M&A) announcements on sh... more This paper particularly addresses the impact of mergers and acquisition (M&A) announcements on share prices in Pakistani stock market from 2006 to 2014. It uses event study method for a sample of 32 M&A announcements from both financial and non-financial sectors. The result shows that M&A declarations do not signal any significant information to Pakistani market. Therefore, the findings show statistically insignificant abnormal returns on announcements of M&A, however a significant positive abnormal return just before proclamation of merger and acquisitions is noted. Similarly, the bidder firms show significant share price reaction and also some gains before the announcement which may be because of leakage of information (Khan, 2011). While after the declaration both target and bidder firms experience losses but overall conclusion detects that the target companies get fewer abnormal earnings as compared to acquirer firms in case of acquisitions. The insignificant unexpected returns on announcement date of M&A do not support semi-strong form of EMH. The findings of this study help investors in devising their investment strategies based on the timing of important announcements by companies such as M&A.
A B S T R A C T This paper analyses the impact of capital gains taxation (CGT) on dividend policy... more A B S T R A C T This paper analyses the impact of capital gains taxation (CGT) on dividend policy among firms that are listed at the Karachi Stock Exchange (now, Pakistan Stock Exchange or PSX). The reason for choosing the Pakistani market is the country's idiosyncratic taxation system regarding dividend and capital gains. In Pakistan, capital gains were tax-free and taxation of capital gains was levied for the first time beginning July 2010. This motivates us to study the special case of Pakistani market regarding the relationship between the imposition of capital gains taxation and the pattern of dividend payouts. For this purpose, we use both the static and dynamic panel data models (generalized methods of moments) to analyze dividend payment behavior for a sample of 284 non-financial firms listed at the PSX from the years 2006–2014. We use the dividends to total assets ratio as a dependent variable and a taxation dummy along with other control variables such as liquidity, leverage, profitability, last year's dividend and firm size, as explanatory variables. Results of the regressions show that capital gains tax has no impact on dividend payments, while profitability, leverage, and last year's dividend are the most significant determinants of dividend payments in the Pakistani market.
This research is an empirical investigation of the weak form of efficiency of the Ka-rachi Stock ... more This research is an empirical investigation of the weak form of efficiency of the Ka-rachi Stock Exchange (KSE-100) Index, which is the prominent index of Pakistan Stock Exchange (formerly Karachi Stock Exchange). The contribution of this paper is to analyze a longer 24 years' sample period (1991-2015) with three frequencies of data – daily, weekly and monthly index returns. The results show that return series of three frequencies have a negatively skewed, leptokurtic and non-normal distribution. The non-parametric Phillips-Perron (PP) test and parametric Augmented Dickey-Fuller (ADF) test rejected the non-stationarity hypothesis for index returns at the level for all daily, weekly and monthly data. The auto-correlation of randomness for the chosen period rejected the Random Walk Hypothesis (RWH) for daily and weekly index returns but documented the existence of RWH for monthly index returns. Lastly, the findings of run tests show market inefficiency on daily and weekly data and efficiency for monthly returns. The findings are not consistent with efficiency theory as the stock returns do not follow the random walk hypothesis and hence nullify weak form of efficiency for daily and weekly returns. However, the research documents weak-form of efficiency for monthly returns; the existence of randomness in monthly data is not surprising for an emerging market like Pakistan which does not have a long memory to remember previous monthly prices. Positioned upon weak form of efficiency assumption, the investors on the KSE can make abnormal returns on the basis of historical share prices (Malhotra, Tandon, & Tandon, 2015). The concept of market efficiency is important for analysts, for investor's investment decisions, and regulators of stock exchange to improve the flow of information. Further research can be done with more sophisticated techniques of testing weak form of efficiency.
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Papers by Naimat Ullah Khan
businesses in the United Arab Emirates (UAE).
Design/methodology/approach – Semi-structured interviews are conducted with 16 owners and heirs of
UAE family businesses. The interviews – face-to-face and asynchronous electronic – are conducted instead of a
questionnaire to get an in-depth analysis of the topic in the context of both medium- and large-sized family businesses.
Findings – The responses are mixed with regard to governance challenges (duality, gender, internal control,
transparency, etc.). The majority of the interviewees indicate that succession planning remains one of the biggest
challenges for family businesses in the UAE. Fifteen of the sixteen interviewees document that a sound succession
strategy must be in place to ensure the continuity of the business and prevent future disputes among potential
successors. Similarly, the respondents also emphasise the importance of transparency and accountability for the
sustainability of family businesses. The sustainability of family businesses relies on many aspects, such as national
regulations, corporate systems and the succession process. Finally, most of the respondents from medium-sized
companies opined that incorporating CG is a time-consuming and expensive process.
Practical implications – The interviewees supported stewardship theory in case family members are
occupying positions on the board as they have more long-term commitment and a greater sense of belonging to the
business (socio-emotional wealth) compared to non-family members. The interviewees acknowledge that the lack of
professionalism and conflicts of interest among family members can be offset by recruiting non-family members.
Originality/value – Family businesses are particularly significant in the Arab world as they account for
over 60% of gross domestic product (GDP) and use above 80% of the workforce which make them interesting
research subject. In addition, this paper explores the CG challenges faced by both large- and medium-sized
family businesses in the UAE within the theoretical framework of stewardship theory.
Financial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour emerging in the context of a desire to deceive the users of financial reports. In this context, research has illustrated how investors can find themselves impacted by such behaviour, with incorrect decision-making around investment decisions being a major issue. However, auditors' perspectives, of obvious importance in such scenarios, given these individuals' role in attesting to the veracity of financial disclosures, have not been investigated. The aim of this study is to address this gap by seeking the experiences of auditors in the developing nation of Pakistan, an environment in which the significant impact of financial improprieties is well-documented.
Design/methodology/approach
Interviews with 50 Pakistani-based auditors were conducted to gather perceptions about the nature and prevalence of financial shenanigans. The questions posed were structured to address issues relating to both the drivers of and methods used to operationalise financial malfeasance.
Findings
The views expressed by the participants suggest that this type of malpractice is common, with a variety of forms employed and a level of audacity and shamelessness is striking. The results indicate the absence of the three institutional pillars conventionally associated with motivating organisational attempts to legitimise behaviour and maintain social contracts. When considered alongside recent findings that the audit profession in Pakistan may not always play an effective monitoring role, we argue that the evidence suggests the existence of motivations for legitimising strategies are not yet fully understood.
Research limitations/implications
This contention helps address recent calls for investigation of issues around legitimising tendencies where theoretical understanding is incomplete. A full understanding of the embedded practices will provide capital providers with the opportunity to make more informed decisions regarding their investments in Pakistani firms by highlighting the financial shenanigans involved, including the sheer audacity apparently associated with the observed behaviour.
Originality/value
Earnings management and auditing have not been studied widely in Pakistan despite the abundant and persistent nature of corporate scandals across the nation for many decades. Whilst implementation (and enforcement) of some accounting and auditing standards have taken place recently, the financial collapses continue, and understanding regarding the on-going fraud is urgently needed. The extent and shameless nature of the perceived behaviour are striking, suggesting that those closest to financial reporting in Pakistan see fraudulent financial reporting as being close to, if not yet fully representative of, normal practice.
countries of Pakistan and Malaysia has been discussed in this
paper. The research paper uses document analysis to identify
different products offered by five full-fledged Islamic banks in
Malaysia and Pakistan. It is evident from the research that Islamic
banking sector in Pakistan is not tapping its full growth potential
as in case of Malaysia. It is also concluded that the trade financing
and asset financing products offered by Islamic banks in Malaysia
are more diverse than the products offered by its counterparts in
Pakistan. The paper gives insight to the Shariah complaint board
to introduce new products while learning from the experience of
other countries. This research does not focus on investigating the
reasons behind these differences; however, it initiates a discourse
in this direction.
businesses in the United Arab Emirates (UAE).
Design/methodology/approach – Semi-structured interviews are conducted with 16 owners and heirs of
UAE family businesses. The interviews – face-to-face and asynchronous electronic – are conducted instead of a
questionnaire to get an in-depth analysis of the topic in the context of both medium- and large-sized family businesses.
Findings – The responses are mixed with regard to governance challenges (duality, gender, internal control,
transparency, etc.). The majority of the interviewees indicate that succession planning remains one of the biggest
challenges for family businesses in the UAE. Fifteen of the sixteen interviewees document that a sound succession
strategy must be in place to ensure the continuity of the business and prevent future disputes among potential
successors. Similarly, the respondents also emphasise the importance of transparency and accountability for the
sustainability of family businesses. The sustainability of family businesses relies on many aspects, such as national
regulations, corporate systems and the succession process. Finally, most of the respondents from medium-sized
companies opined that incorporating CG is a time-consuming and expensive process.
Practical implications – The interviewees supported stewardship theory in case family members are
occupying positions on the board as they have more long-term commitment and a greater sense of belonging to the
business (socio-emotional wealth) compared to non-family members. The interviewees acknowledge that the lack of
professionalism and conflicts of interest among family members can be offset by recruiting non-family members.
Originality/value – Family businesses are particularly significant in the Arab world as they account for
over 60% of gross domestic product (GDP) and use above 80% of the workforce which make them interesting
research subject. In addition, this paper explores the CG challenges faced by both large- and medium-sized
family businesses in the UAE within the theoretical framework of stewardship theory.
Financial shenanigans are the omissions or actions undertaken with the purpose of misrepresenting an organisation's financial statements. Many examples now exist of such behaviour emerging in the context of a desire to deceive the users of financial reports. In this context, research has illustrated how investors can find themselves impacted by such behaviour, with incorrect decision-making around investment decisions being a major issue. However, auditors' perspectives, of obvious importance in such scenarios, given these individuals' role in attesting to the veracity of financial disclosures, have not been investigated. The aim of this study is to address this gap by seeking the experiences of auditors in the developing nation of Pakistan, an environment in which the significant impact of financial improprieties is well-documented.
Design/methodology/approach
Interviews with 50 Pakistani-based auditors were conducted to gather perceptions about the nature and prevalence of financial shenanigans. The questions posed were structured to address issues relating to both the drivers of and methods used to operationalise financial malfeasance.
Findings
The views expressed by the participants suggest that this type of malpractice is common, with a variety of forms employed and a level of audacity and shamelessness is striking. The results indicate the absence of the three institutional pillars conventionally associated with motivating organisational attempts to legitimise behaviour and maintain social contracts. When considered alongside recent findings that the audit profession in Pakistan may not always play an effective monitoring role, we argue that the evidence suggests the existence of motivations for legitimising strategies are not yet fully understood.
Research limitations/implications
This contention helps address recent calls for investigation of issues around legitimising tendencies where theoretical understanding is incomplete. A full understanding of the embedded practices will provide capital providers with the opportunity to make more informed decisions regarding their investments in Pakistani firms by highlighting the financial shenanigans involved, including the sheer audacity apparently associated with the observed behaviour.
Originality/value
Earnings management and auditing have not been studied widely in Pakistan despite the abundant and persistent nature of corporate scandals across the nation for many decades. Whilst implementation (and enforcement) of some accounting and auditing standards have taken place recently, the financial collapses continue, and understanding regarding the on-going fraud is urgently needed. The extent and shameless nature of the perceived behaviour are striking, suggesting that those closest to financial reporting in Pakistan see fraudulent financial reporting as being close to, if not yet fully representative of, normal practice.
countries of Pakistan and Malaysia has been discussed in this
paper. The research paper uses document analysis to identify
different products offered by five full-fledged Islamic banks in
Malaysia and Pakistan. It is evident from the research that Islamic
banking sector in Pakistan is not tapping its full growth potential
as in case of Malaysia. It is also concluded that the trade financing
and asset financing products offered by Islamic banks in Malaysia
are more diverse than the products offered by its counterparts in
Pakistan. The paper gives insight to the Shariah complaint board
to introduce new products while learning from the experience of
other countries. This research does not focus on investigating the
reasons behind these differences; however, it initiates a discourse
in this direction.
The allocation of a specific fiscal amount for each province is a constitutional requirement in Pakistan, decided as per the National Finance Commission Award every five years. The 7th NFC Award was announced in 2010, after which there seems to be a deadlock-which is clearly a constitutional violation. The structure and dynamics revolving around NFC need to be reviewed to understand this deadlock and provide meaningful recommendations for successful devolution. PRIME Institute, an independent and private think tank based in Islamabad, secured support from National Endowment for Democracy (NED) to undertake a project for providing independent research, recommendations and advocacy on the fiscal devolution structure in Pakistan for the years 2017 and 2018. The project activities include dialogues at provincial level, annual conference in the capital and publication of five papers, two of which are in process of publication. As part of the project, a working group has also been formed which meets regularly to discuss current situation regarding NFC and way forward. The purpose of the working group is to get a better understanding of the dynamics of the NFC award, its significance and objectives, its methodology and an analysis of its effectiveness. Members also discuss the progress of the project and the practical next steps based on the political environment and simultaneous research analysis. In year 1, we produced basic research on NFC issues and proposed reforms; in year 2, we advanced this research by engaging with provincial governments and stakeholders widely; in year 3, we want to take a collaborative approach of working with the new government. My part of the research is: "Vertical distribution of divisible pool resources including distribution of funds for GB/AJK, establishment of fund for security and natural disasters"