This study aims (i) to assess the prevalence of Earnings Management among non-financial Maltese Listed Entities; (ii) to explore the underlying motivations and drivers that give rise to such practices; and (iii) to investigate the methods and techniques currently employed by the auditee or auditor to prevent or detect Earnings Management within Maltese Listed Entities. A sequential two-phase explanatory mixed-methods approach was employed: first, the accrual-based model was applied to assess the presence of Earnings Management, followed by 20 semi-structured interviews with Audit Partners and Chief Financial Officers. While Earnings Management sector-specific behaviours were observed, no statistically significant differences in the distribution of Earnings Management across sectors were found, suggesting overall consistency. Despite its presence, Earnings Management remains ambiguous, with diverse interpretations creating opportunities for exploitation. The principles-based nature of IFRS facilitates Earnings Management, allowing subjective judgment to serve managerial interests. Motivations for the practice include company-level capital pressures and contractual obligations, with auditors seen as key deterrents owing to their commitment to professional standards. While current preventative measures are effective, the study calls for stronger scrutiny of management and auditors. It also highlights opportunities for local regulatory bodies to enhance consistency and depth in their approach to addressing complex Earnings Management techniques. Lastly, External Auditors face challenges such as quality gaps between Big 4 and non-Big 4 firms, and client resistance during efforts to detect Earnings Management. The study has sought to understand the Earnings Management phenomenon within the Maltese context, given its negative implications on Financial Reporting.
Islamic finance, grounded in Shariah principles derived from the Al-Quran and Sunnah, promotes risk sharing, ethical conduct, and financial stability, thereby shaping economic outcomes in countries where Islamic financial institutions are systemically important. Among the various components of Islamic finance, Islamic banking constitutes the dominant segment and plays a central role in channeling capital across borders. Given the increasing globalization of Islamic financial markets, the relationship between Islamic financial development and foreign direct investment (FDI) outflows warrants rigorous empirical examination. This study investigates the impact of Islamic banks and key Islamic financial instruments—namely Sukuk and Takaful—on foreign direct investment outflows (FDI-Out) in leading Islamic finance economies, including Oman, the United Arab Emirates, Qatar, Nigeria, Malaysia, Indonesia, Saudi Arabia, Bahrain, and Kuwait. Balanced panel data are analyzed using the ordinary least squares estimation technique implemented in Stata 18, with Islamic banks’ profitability incorporated as both an explanatory and moderating variable. The empirical findings reveal three robust results. First, a statistically significant negative association is observed between Islamic banks’ profitability and FDI-Out, suggesting that higher domestic profitability may incentivize capital retention rather than outward investment. Second, Sukuk issuance is found to exert a direct negative effect on FDI-Out, whereas Takaful penetration exhibits a positive relationship, indicating heterogeneous effects across Islamic financial instruments. Third, when Islamic banks’ profitability is introduced as a moderating factor, Sukuk demonstrates a positive and significant impact on FDI-Out, implying that profitable Islamic banking systems enhance the outward investment channel of Sukuk markets. These findings highlight the complementary roles of Islamic banking performance and capital market instruments in shaping cross-border investment behavior. Overall, the results suggest that a well-integrated Islamic financial system can influence the direction and scale of international capital flows, with important implications for policymakers seeking to balance domestic investment, financial stability, and outward economic expansion in Shariah-compliant financial environments.
An integrated framework for combining normal costing with activity-based costing (ABC) is developed and demonstrated to address persistent limitations in conventional cost accounting practices. Although normal costing remains widely adopted due to its operational simplicity and alignment with financial reporting, its reliance on broad overhead allocation bases has been shown to impair cost accuracy in complex production environments. Conversely, ABC offers superior causal attribution of indirect costs but is often perceived as difficult to integrate into routine costing systems. To reconcile these approaches, a structured integration methodology is proposed and illustrated through an applied case based on the machining department of an automobile parts manufacturer. Using a controlled hypothetical dataset to ensure analytical transparency, unit product costs are first determined under the traditional costing system using both full costing and normal costing approaches. Subsequently, the same cost structures are recalculated within an ABC framework, again under both full costing and normal costing assumptions, allowing systematic comparison across costing logics. The results demonstrate that integrating ABC with normal costing enhances cost precision without sacrificing the operational advantages of normal costing, particularly in departments characterized by high overhead intensity and activity heterogeneity. It is further shown that the integrated approach mitigates cost distortion arising from volume-based allocation while preserving consistency with standard cost-setting practices. From a methodological perspective, the study advances existing literature by explicitly operationalizing the coexistence of ABC and normal costing rather than treating them as mutually exclusive systems. Practical implications are highlighted for manufacturing enterprises seeking incremental adoption of ABC principles within established accounting infrastructures. In addition, the necessity of enterprise resource planning (ERP) systems is emphasized, as reliable integration depends on high-resolution activity data and automated cost tracing capabilities. The proposed framework and application procedure are expected to provide accounting practitioners and researchers with a replicable pathway for implementing integrated costing systems that balance analytical accuracy with managerial feasibility.
This study investigates the impact of financial soundness on the profitability of listed commercial banks in Nigeria, with a focus on the determinants of return on assets (ROA). Specifically, the influence of capital adequacy ratio (CAR), operational efficiency (OPE), and non-performing loan ratio (NPLR) on bank profitability was assessed. Additionally, the moderating effect of OPE on the relationship between capital adequacy and ROA was examined. An ex-post facto research design was adopted, utilising secondary data spanning a ten-year period from 2014 to 2023. Data were extracted from the annual reports of the sampled banks and subjected to rigorous descriptive and inferential analyses. Measures of central tendency and dispersion were employed to summarise the data, while hypotheses were tested using ordinary least squares (OLS) regression analysis. The results indicate that CAR exerts a significant positive effect on ROA, suggesting that banks with robust capital buffers are better positioned to absorb financial shocks and sustain income-generating activities. Conversely, OPE was found to have a significant negative effect on ROA, implying that efficiency gains may not automatically translate into higher profitability in the context of Nigerian commercial banks. Similarly, the NPLR exhibited a significant negative relationship with ROA, highlighting the detrimental effect of asset quality deterioration on profitability. The interaction between capital adequacy and OPE was also observed to negatively affect ROA, indicating that excessive OPE without commensurate capital support may undermine profitability. These findings underscore the necessity of a balanced approach to financial soundness, where adequate capitalisation is maintained alongside prudent operational management. It is therefore recommended that management of Nigerian commercial banks maintain capital levels above regulatory minima to reinforce resilience and income-generating capacity, while strategically enhancing OPE to optimise profitability. The study contributes to the literature by providing empirical evidence on the complex interplay between financial soundness indicators and bank profitability, offering actionable insights for policymakers, regulators, and banking executives seeking to strengthen the stability and performance of the sector.
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