Papers by Mohammad Hudaib
International Journal of Financial Studies
This paper explores the role of social capital in contributing to the success of a new breed of o... more This paper explores the role of social capital in contributing to the success of a new breed of organizations known as ‘blank check companies’ or special purpose acquisition companies (SPACs) that are set up solely to target and acquire listed companies as a fast-track route to gain listing status in the stock market. The paper is a case study of Pershing Square Holdings Ltd., St. Peter Port, UK (PSH), which launched SPAC IPOs (Initial Public Offerings), Pershing Square Tontine Holdings Ltd., New York, NY, USA (PSTH), which succeeded in raising the largest capital from influential investors in 2020. Social capital theory is employed to provide theoretical structure for the analysis. Using annual reports, publicly available information on the internet, as well as social media platforms related to the company and its strategy, the authors critically analyse and highlight how the Tontine’s founder and his team utilized their structural, relational, and cognitive social capital to attra...
Journal of International Accounting, Auditing and Taxation, 2019
Prior whistleblowing research documents various relationships between certain individual characte... more Prior whistleblowing research documents various relationships between certain individual characteristics and the intention to report workplace irregularities (whistleblow). However, auditors are trained to work in teams and to make decisions in consultation with the group. We study the extent to which an individual auditor's ethical judgment may be affected by the strength of the group cohesiveness in the audit team. Our research extends prior studies on whistleblowing in the auditing context by examining the moderating effect of group cohesion on the relationship between several individual characteristics and whistleblowing intentions. Results based on survey data of 54 audit teams comprising 226 external auditors indicate significant relationships between nearly all individual characteristics (attitudes, perceived behavioral control, independence commitment and personal responsibility for reporting, and personal cost of reporting) and whistleblowing intentions. However, we find no significant relationship between desired moral approbation and whistleblowing intentions. Further, we find the presence of strong group cohesion reduces the tendency of whistle-blowing intentions of individuals with strong individual characteristics. Though further research is warranted, our study suggests the need for audit firms to assess both group cohesiveness and individual characteristics when assembling audit teams.
Journal of Islamic Accounting and Business Research
Purpose Microfinance institutions (MFIs), including Islamic microfinance institutions (IMFIs) in ... more Purpose Microfinance institutions (MFIs), including Islamic microfinance institutions (IMFIs) in Muslim countries, have spread across the globe and transformed into a new industry. However, how IMFIs in Indonesia evolved to become an important sector serving society has not been rigorously explored. Therefore, the purpose of this paper is to address the lacuna on the emergence of an industry by examining the development of Islamic microfinance sector in Indonesia. Design/methodology/approach The paper adopts the historical research method to narrate the evolution of this specific sector based on the data collected through oral history and published academic research documents during various periods of Indonesia’s economic and political milieu. Findings This paper demonstrates that the emergence and development of IMFIs in Indonesia has been shaped within the wider process of socio-political changes, particularly, the role of Islamic movement and politics in Indonesia. Originality/va...
British Accounting Review, 2013
Whistle-blowing has received considerable attention in the ethics literature. However, following ... more Whistle-blowing has received considerable attention in the ethics literature. However, following the collapse of Arthur Andersen in the Enron debacle, whistle-blowing within audit firms has taken on greater importance. Given the profession's requirements to be confidential, independent and to act in the public interest (e.g. Sarbanes-Oxley Act, 2002), there is a need for a model that is specific to the audit profession (e.g. Louwers, Ponemon, & Radtke, 1997), and in particular, that addresses auditors' whistle-blowing intentions. This paper presents a conceptual model on whistle-blowing intentions among external auditors where an auditor's individual factors (attitudes toward whistle-blowing, perceived behavioural control, independence commitment, personal responsibility for reporting and personal cost of reporting) have a direct influence on his or her intentions to whistle-blow, but are moderated by isomorphic factors (perceived organisational support and team norms) and issue-specific factors (perceived moral intensity). Using justice and institutional theories, the proposed model anticipates that whistle-blowing within an audit firm produces both positive and negative consequences to society, the audit firm and the individual whistle-blower. However, where audit firms have adequate formal supporting mechanisms for reporting wrongdoings to internal and external parties, the negative effects and personal costs of reporting will be minimised.
This paper reports the results of an investigation on audit perceptions gap that exist in the Sau... more This paper reports the results of an investigation on audit perceptions gap that exist in the Saudi environment. The methodology used in the study is a combination of mail questionnaires and semi-structured interviews. While Kruskal-Wallis one-way analysis of variance shows the directions of respondents’ views on the issues, analysis of the semi-structured interviews provided further depth and coverage into the causes that shaped the respondents’ perceptions. The principal findings of the study were that two macro factors viz. ideology and legal structure in the Saudi environment significantly affect audit perceptions gap. This indicates the need for policy makers to take appropriate measures to narrow the gaps signalled by the research by taking into account the two macro factors in the environment identified as shaping the perceptions of both auditors and users, if the auditing profession is to fulfil the desired role and objectives in Saudi Arabia.
The centrality of accounting research has been in a constant shift between normative thinking and... more The centrality of accounting research has been in a constant shift between normative thinking and exploring empirical practices. The reason for the shift is complex but one reason may be attributed to the disillusionment with the current normative thinking and the growing interest in exploring accounting realities from multiple branches of socio-economic life. Normative thinking is generally based on previous decade’s philosophical ideas that have not be captured in practice but which advocates on designing accounting systems that are based on specifically advocated moral philosophy. When scandals emerged as a result of accounting practices and behaviours of those entrusted with the resources, the disillusion with the advocated moral foundation leads to a shift towards exploring the reality of practices and at the same time searching for a new moral philosophy for accounting. This paper narrates how accounting researchers emerge as a ‘tribe’ that pastures within well protected te...
Ethics - perceptions of accountants in practice
External auditors might not provide value by adding to the reliability and credibility of financi... more External auditors might not provide value by adding to the reliability and credibility of financial reporting if their independence is impaired. This study examines the interactive effects of change in managing director/chief executive officer (MD) and financial distress together with three control variables (type of audit firm; audit fees; and company size) on first, audit opinion and secondly on auditor switching. Based on a sample of 297 UK listed companies between 1986 and 1995 the logistic regression suggests that companies that are financially distressed and change their MD are most likely to receive a qualified audit report, ceteris paribus. Financial distress rather than change in MD is more important in determining audit opinion. Familiarity threat is found to be present specifically when distressed auditees that do not change their MDs receive unqualified audit report. Auditees have a tendency to switch auditor after receiving a qualified audit opinion, and the probability...
Accounting for corruption within Islamic countries
Journal of Islamic Accounting and Business Research
Purpose Despite the growing literature on corruption, little is known about what is happening in ... more Purpose Despite the growing literature on corruption, little is known about what is happening in most Islamic countries. Hence, the purpose of this paper is to argue that focussing on the adopted politico-economical ideology such as neoliberalism contributes in understanding the root of corruption. Design/methodology/approach Critical realism of the state of corruption in Muslim countries and secondary sources available in the literature review help account for corruption within the local settings. Findings Corruption takes on various forms and functions in different contexts, and it can occur at the international and national arenas and at various layers of the state. The paper argues that the adopted neoliberal politico-economical strategy in Muslim countries is the main source of corruption. Research limitations/implications Corruption ranges from an act of payment that contradicts the law to an endemic malfunction of a political and economic system that may be attributed to indi...
Journal of Business Ethics, 2015
This paper reports the results of a survey with public accountants in Barbados on their intention... more This paper reports the results of a survey with public accountants in Barbados on their intention to report a superior's unethical behaviour. Specifically, it investigates to what extent perceived organisational support (POS) in audit organisations would moderate Barbadian public accountants' intentions to blow the whistle internally and externally.
Accounting Forum, 2015
This paper utilises a political lens in considering the cause for the production of corruption an... more This paper utilises a political lens in considering the cause for the production of corruption and the role of political leadership. Specifically, the notion of personalisation of power as advocated by Slater (2003) is adopted to portray how the adoption of neoliberalism ideology by an aspiring autocratic leader results in the weakening of the infrastructural power through three strategies: packing, rigging and circumventing. We use Perwaja Steel as a case study to demonstrate the modus operandi of corruption in a state-owned enterprise in Malaysia.
The two Ws of Islamic accounting research
Journal of Islamic Accounting and Business Research, 2010
... by Napier (2009, p. 124), the temporal and spatial meaning of Islamic ... which used complex ... more ... by Napier (2009, p. 124), the temporal and spatial meaning of Islamic ... which used complex schemes of financial engineering often by getting around accounting ... in the presentation of financial information", Accounting, Commerce & Finance: The Islamic Perspective Journal, Vol. ...
Islamic finance: from sacred intentions to secular goals?
Journal of Islamic Accounting and Business Research, 2010
... financial products was made based on the unduly application of maqasid al-shari'ah (purp... more ... financial products was made based on the unduly application of maqasid al-shari'ah (purposes of ... takes into account the degree of benefits for human interests (maslahah) as opposed ... Other adaptive mechanisms in legitimising the modernization of Islamic finance and financial ...
Journal of Islamic Accounting and Business Research, 2011
Arab springtime: in search of Al-Adalah Al-Ijtima’iyyah Fil Islam[1]
Journal of Islamic Accounting and Business Research, 2011
... Alim, YH (1991), Al-Maqasid al Ammah li al Shari'ah al Islamiyah (The end goals of the I... more ... Alim, YH (1991), Al-Maqasid al Ammah li al Shari'ah al Islamiyah (The end goals of the Islamic Shariah), International Institute of Islamic Thought, Herndon, VA Kamali, MH (2002), The Dignity of Man: An Islamic Perspective, The Islamic Texts Society, Cambridge. ...
Journal of Islamic Accounting and Business Research, 2013
and indirect financial interest through shareholdings while users have lower confidence on audito... more and indirect financial interest through shareholdings while users have lower confidence on auditor independence involving personal relationship with a political figure and client imposing strict budget on audit fees. Within the auditor group, non-Big4 auditors expressed more concerned for situations related to family relationship and restriction on audit fees. Originality/value: Research on auditor independence in Indonesia remains scarce despite the country's eagerness to adopt "international" accounting and auditing standards. In addition, the cultural context of Indonesia also helped in explaining our findings.
Managerial Auditing Journal, 2006
Purpose-The main purpose of this paper is to examine one aspect of auditor-client relationship, n... more Purpose-The main purpose of this paper is to examine one aspect of auditor-client relationship, namely audit tenure and switching behaviour, and factors affecting it. Lengthy audit tenure with the same client has been cited as one of the threats to auditor independence. Given the importance of this issue, this research attempts to shed some light on the effect of audit tenure and switching behaviour on auditor independence in Malaysia. Design/methodology/approach-This study evaluates the effects of various independent variables on switching behaviour and audit tenure using logistic regression analysis. Findings-An examination of 297 companies listed on the Kuala Lumpur Stock Exchange over a period of 11 years reveals audit firm switching to be significantly associated with distressed large clients and that the length and direction of switch depend upon the type of audit firm. Research limitations/implications-A number of important variables such as corporate governance characteristics, audit and non-audit fees and types of audit opinion that could enhance our understanding of audit tenure and auditor switching in Malaysia, were not incorporated into our regression models. Hence, future studies may consider such variables. Originality/value-This study is the first conducted using Malaysian data where audit tenure and switching are used as dependent variables. The results have important implications on the auditing profession and regulators in Malaysia.
Tribute to Professor Dr Sofyan Syafri Harahap, Rahimahu’Allah (1956-2012)
Journal of Islamic Accounting and Business Research, 2012
Journal of International Accounting, Auditing and Taxation, 2007
This paper offers an insight into the types of 'audit expectations gap' that exist within a cultu... more This paper offers an insight into the types of 'audit expectations gap' that exist within a cultural context. Specifically, it investigates if the business and social environment affect the perceptions of audit performance of users and auditors. Using a combination of mail questionnaires and semi-structured interviews, the study reveals the existence of a 'performance gap' with respect to the roles specified in the statutory pronouncements and those that can reasonably be expected of auditors in Saudi Arabia. The results further indicate the 'performance gap' arises from four factors in the environment within which auditing is practiced: licensing policy, recruitment process, the political and legal structure, and dominant societal values. Interview results reveal the influence of institutional and cultural settings on the audit expectations gap and indicate that the inclusion of Islamic principles in auditing standards and the code of ethics would help reduce the expectations gap that exists in Saudi Arabia.
Journal of Business Finance & Accounting, 2011
This paper extends prior research on the relationship between governance quality and auditor remu... more This paper extends prior research on the relationship between governance quality and auditor remuneration. We examine the influence of audit committee effectiveness (ACE), a proxy for governance quality, on audit fees (AF) and non-audit services fees (NASF) using a new composite measure comprising audit committee independence, expertise, diligence and size. We find that after controlling for board of director characteristics, there is a significant positive association between ACE and AF only for larger clients. Our results indicate that effective audit committees undertake more monitoring which results in wider audit scope and higher audit fees. Contrary to our expectations, we find the association between ACE and NASF to be positive and significant, especially for larger clients. This suggests that larger clients are more likely to purchase non-audit services (NAS) even in the presence of effective audit committees probably due to the complexity of their activities. Overall, our findings support regulatory initiatives aimed at improving corporate governance quality.
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Papers by Mohammad Hudaib