• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing:  ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2014 Vol.5(2): 180-183 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2014.V5.366

Accounting Irregularities in Related Party Transactions

Akmalia M. Ariff and Hafiza A. Hashim
Abstract—This paper presents financial reporting issues surrounding Related Party Transactions (RPTs). While RPTs can be value-enhancing for companies, those that are used to expropriate shareholders’ wealth may need to be shielded by accounting irregularities. We discuss the theoretical link between RPTs and accounting irregularities and review evidence on accounting irregularities involving RPTs. We also discuss issues with the existing evidence and suggest that future research should work towards identifying: a) the background of RPTs that served as expropriation mechanism, b) the types of RPTs that normally involved accounting irregularities, and c) the effect of accounting irregularities involving RPTs. The results of studies with such approach may benefit the regulators in curbing accounting irregularities, especially those that involved RPTs.

Index Terms—Related party transaction, accounting irregularities, Malaysia.

The authors are with Universiti Malaysia Terengganu, Kuala Terengganu, Terengganu, 21030 Malaysia (e-mail: akmalia.ariff@umt.edu.my, hafizaaishah@umt.edu.my).


Cite: Akmalia M. Ariff and Hafiza A. Hashim, "Accounting Irregularities in Related Party Transactions," International Journal of Trade, Economics and Finance vol.5, no.2, pp. 180-183, 2014.

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