The adoption of accounting standards by Malaysian cooperatives

The ambiguous landscape in the adoption of accounting standards in Malaysia's cooperative sector is a critical concern, given that this sector also contributes to the national economy. This study investigates the complexities of the compatibility of accounting standards, namely the Malaysian Financial Reporting Standards (MFRS) and the Malaysian Private Entity Reporting Standards (MPERS), with the various cooperative clusters in Malaysia. Investigating 60 cooperatives, this research examines existing accounting standards adopted by cooperatives, explores the associations between cooperative characteristics such as size, type of business, members' share capital, age, leverage, profitability and the adoption of accounting standards. In addition, this research looks into the reasons of the non-disclosure of cooperatives' choice of accounting standards. Through a rigorous mixed methods approach that integrates quantitative analysis using Pearson Chi-Square, Logistic Regression and qualitative surveys, the study unexpectedly revealed no significant association and differences between the characteristics of cooperatives and the selection of accounting standards. The qualitative phase provides valuable insights, showing that the cooperatives that chose MFRS prioritized wide applicability, ensuring transparency and legal compliance, while those that selected MPERS prioritized relevance, simplicity and ease of implementation. Small cooperatives that face communication and knowledge gaps, mostly choose MPERS. Beyond the empirical insights, this research supports adaptive standards, tailored education, and proactive regulatory guidance, emphasizing the need for clear and sector-specific accounting standards for financial reporting transparency. This study informs regulatory reforms and educational initiatives, strengthens stakeholder confidence, and improves the integrity of the cooperative sector's financial reporting.