Kuala Lumpur, Malaysia – A group of innovators comprising three lecturers and a PhD candidate from the Faculty of Accountancy, UiTM Puncak Alam has emerged victorious at the prestigious International Innovation Arsvot Malaysia (IIAM) 2023. Their groundbreaking product, My Forced Financial Restatement (MyFFR) Indicator, garnered immense recognition at the event, winning three coveted awards: the Gold Award, the Best Category Award, and the Best Visual Award. This remarkable achievement highlights their exceptional contribution to innovation in accounting and their dedication to the theme of “Innovations Towards SDG 2030” at IIAM 2023.
The IIAM 2023 event, which took place on the 24th and 25th of June 2023 at Corus Hotel Kuala Lumpur, showcased groundbreaking innovations aligned with the theme of “Innovations Towards SDG 2030.” The Sustainable Development Goals (SDGs) set by the United Nations in 2015 aim to address global challenges and promote social, economic, and environmental balance to ensure peace, prosperity, and the eradication of poverty by 2030.
The team’s revolutionary product, MyFFR Indicator, targets forced restatement firms, which are companies that have admitted or been identified for making intentional or unintentional attempts to mislead in financial reporting. The increasing number of accounting scandals has amplified the demand for an effective tool that can predict such firms at an early stage before the financial reports are published.
The innovative MyFFR Indicator ambitiously aims to simulate the prediction of firms that violate the Malaysian Financial Reporting Standards (MFRS) through deliberate income-increasing misstatements, which are likely to result in income-decreasing forced restatements. This prediction tool utilizes a comprehensive database of income-increasing financial misstatements and analyzes a wide range of financial and corporate governance attributes of misstating firms.
To ensure accurate predictions, the team employed advanced methodologies, including the stepwise logit method and data analysis based on the penalized likelihood logit model. The latter is a reliable test that produces less biased results, especially when dealing with rare events such as forced restatements. The analysis identified significant predictors such as board independence, political connections, the firm’s level of internal funds, share price volatility, changes in inventories, and actual issuance.
The culmination of this thorough analysis is the MyFFR Score, a scaled probability that serves as a red flag or signal of the likelihood of income-decreasing forced restatements. This prediction tool plays a pivotal role in enabling financial statement users to identify risky misstatement firms that warrant further investigation.
The remarkable success achieved by this Faculty of Accountancy team at IIAM 2023 showcases their exceptional talent, expertise, and commitment to driving positive change in the accounting industry. Their groundbreaking work not only contributes to the advancement of accounting practices but also aligns with the SDG 2030 goals by promoting transparency, accountability, and sustainable financial reporting.
The Faculty of Accountancy, UiTM Puncak Alam takes immense pride in the accomplishments of its talented lecturers and aspiring PhD candidate, fostering an environment that encourages innovation and excellence. With their revolutionary MyFFR prediction tool, this exceptional team has set a new standard in the field of accounting and has the potential to revolutionize financial reporting practices, ultimately contributing to the achievement of the SDG 2030 goals.
As the world approaches the 2030 deadline for achieving the SDGs, the achievements of these innovators serve as a beacon of hope, inspiring others to pursue innovative solutions that address the pressing challenges facing our society.