Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062

Conference List

Humanities and Social Sciences Letters

September 2020, Volume 8, 3, pp 280-297

Accounting Conservatism and Financial Performance: Accountability of Shariah Compliant Companies in Malaysia

Norfazella Mohd Fariz


Nor Farizal Mohammed


Nur Syifa Zulkepli


Amrizah Kamaluddin

Norfazella Mohd Fariz 1 Nor Farizal Mohammed 2

Nur Syifa Zulkepli 1 Amrizah Kamaluddin 1 

  1. Faculty of Accountancy, Universiti Teknologi MARA (UiTM) Selangor, Puncak Alam Campus, Bandar Puncak Alam, Malaysia. 1

  2. Accounting Research Institute, Universiti Teknologi MARA (UiTM), Shah Alam Campus, Shah Alam; Faculty of Accountancy, Universiti Teknologi MARA (UiTM Selangor, Puncak Alam Campus, Bandar Puncak Alam, Malaysia. 2

Pages: 280-297

DOI: 10.18488/journal.73.2020.83.280.297

Share :

Article History:

Received: 27 April, 2020
Revised: 02 June, 2020
Accepted: 06 July, 2020
Published: 23 July, 2020


The accountability of Shariah-compliant companies is essential to ummah to ensure the quality of earnings and enhance performance. This study examined the association of accounting conservatism, which is a proxy for accounting quality and the financial performance of Shariah-compliant companies in Malaysia. Financial statements with high quality assist in better decision making, thus preventing fraud activities and misappropriation of assets. The data consisted of 144 firm-year observations of Shariah-compliant companies from 2012 to 2017. The results revealed that accounting conservatism is a feature of financial statements of Shariah-compliant companies in Malaysia and accounting conservatism had a positive association with financial performance. The findings gave insights on the accounting quality and performance of the Islamic capital market in Malaysia. This study contributes to the knowledge of financial reporting quality by explaining the ethical behavior of companies using stewardship theory.
Contribution/ Originality
This study is one of very few studies which have investigated financial performance in relation to conservatism on listed Shariah-compliant companies by using two models which is Basu (1997) and Khan and Watts (2009) model.


Accounting conservatism, Financial performance, Accountability, Shariah-compliant companies, Malaysia.



Google Scholor ideas Microsoft Academic Search bing Google Scholor


Authors acknowledge the financial assistance from the Accounting Research Institute, Universiti Teknologi MARA.

Competing Interests:

The authors declare that they have no competing interests.


All authors contributed equally to the conception and design of the study.

Related Article

( 1 ) Creative Accounting and Financial Performance of Public Listed Companies in Malaysia
( 2 ) Organisation Isomorphism as Determinants of Environmental Management Accounting Practices in Malaysian Public Listed Companies
( 3 ) Accounting Conservatism and Financial Performance: Accountability of Shariah Compliant Companies in Malaysia
( 5 ) Finance-Led Growth and Growth-Led Finance: Evidence from Nigeria Economic and Financial Sector Development
( 7 ) The Virtuous Cycle of Corporate Social Responsibility and Corporate Financial Performance: the Mediating Role of Firm Reputation
( 8 ) Determinants of Transparency in Financial Management on Local Government Websites: Evidence from Indonesia
( 10 ) Teachers of Secondary Education and Professional Stress with Students Performance: A Geographical Case Study
( 11 ) Triad of Big Data Supply Chain Analytics, Supply Chain Integration and Supply Chain Performance: Evidences from Oil and Gas Sector
( 14 ) The Influence of Entrepreneurial Self-Efficacy and Innovation on Firm Performance: Evidence from Thai Startup Firms
( 15 ) Employee Characteristics, Subjective Norms and Work Performance: Integrating the Achievement Goal Orientation Theory and the Theory of Planned Behavior
( 16 ) Impact of Environmental, Social and Governance Dimensions of Corporate Social Responsibility on Firm Performance: Evidence from Nigeria
( 17 ) Affective Humanism: Towards an Ontology for Accountability in Local Government Administration in Nigeria
( 18 ) Accountability through Integrated Reporting: The Awareness and Challenges in Malaysia
( 20 ) Corporate Governance and Firm Risk: Evidence from Malaysian Shariah Compliance Companies
( 23 ) Spatial Variability in the Distribution of Migrants and Indigenous Labour Force among Oil Companies in Ogba/Ndoni/Egbema Local Government Area of Rivers State
( 24 ) Audit Fees and Audit Quality: A Study of Listed Companies in the Downstream Sector of Nigerian Petroleum Industry