Locating fraudulent accounting practices in Malaysia : a Foucauldian perspective

• Main Author: Ahmad Khair, Amal Hayati
• Published: University of Essex 2012
• Subjects: 364.163
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.570659

Fraudulent accounting practices (FAPs) are one of the anti-social practices in recent years that have received considerable attention all• over the world. Prior literature has identified factors that influenced FAPs at both individual and organisational levels such as individual immmoral behaviour and weaken internal control systems, respectively. However, these studies have neglected to take into account factors at the macro level which have influenced the emergence and reinforcement of FAPs especially in developing countries such as in the case of Malaysia. This thesis is an attempt to locate FAPs within the historical context of Malaysian political, economic and social structures. It also considers the possible influence of organisational and individual prevailing factors on the perpetuity of FAPs in the country. Using Foucauldian's genealogy of power/knowledge (GP/K) theoretical framework and qualitative research methods, this thesis found that the formation and continuity of existing FAPs are the result of the reshaping of Malaysian political, economic and social policies by the British imperialist power. More specifically, the imposition and support given to the current ruling party have provided the ruling elite and its allies with power and knowledge in pursuing own interest at the detriment of society. Through the analysis of four major FAPs cases and face-to-face interviews, to substantiate this argument, the study adopts archive document analysis to understand the Malaysian history pre and post independence in 1957. The evidence shows that FAPs in Malaysia are attributed to the dominant personality that has emerged and reinforced by the leader of the ruling party who managed to concentrate power in his hands. To protect himself and his crony capitalists who committed the crimes, he utilised his disciplinary and governmentality powers to inflict punishment and normalise the actions of individuals in different positions within Malaysian society who oppose to such conducts. The analysis also demonstrates how large sums of public money have been fraudulently amassed by individuals holding political power and in association with their few cronies. Thus, the perpetuity of FAPs by such powerful alliance plays a primary role in impairing Malaysian socioeconomic welfare often seen as a result of the bio-power in the hands of the PMs. Although the crony capitalist hypothesis focuses on the close association between two parties: corporate executives and political elites, the thesis also found that FAPs would not have been continually occurred without the facilitating role played by the accounting professionals who are interested in their own financial gains, which contradict their professional claims of duty of care in serving public interest against such activities. Although countless efforts are claimed to have been taken to overcome the phenomenon by the ruling party in Malaysia, serious national and international concerted reforms are needed to limit its dangerous effects on Malaysia and its development.