Open AccessAccounting Standards Compliance and Comparability of Measurement Practices: The Case of Malaysian General Insurers
Author(s) -
Ku Nor Izah Ku Ismail,
Shamsul Nahar Abdullah
Publication year - 2020
Publication title -
malaysian management journal/malaysian management journal
Language(s) - English
Resource type - Journals
eISSN - 2289-6651
pISSN - 0128-6226
DOI - 10.32890/mmj.3.2.1999.8563
Subject(s) - comparability , accounting , business , index (typography) , audit , compliance (psychology) , accrual , actuarial science , earnings , mathematics , psychology , computer science , social psychology , combinatorics , world wide web
This study determines the extent of compliance level of Malaysian general insurers towards the requirements stipulated in MAS 3 (Malaysian Accounting Standard No.3: Accounting for General Insurance Business) and GPI (Guidelines on Accounting for Insurance Business, JPI/GPI 3), and subsequently determines the comparability of relevant measurement practices outlined in the Standards and Guidelines. Data from the annual reports of 35 insurers were gathered and 18 measurement practices were examined in the study. The Herfindahl index (known as H-index) was employed in measuring the comparability of measurement practices. Except for the accrual of dividends, results suggest that the compliance level of companies towards most of the other items were high. Nevertheless, results on comparability of measurement practices were rather mixed, having H-indices ranging from a low score of 0.47 to a perfect score of 1.