Browsing by Author "Deepal, A.G."

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Audit Expectation Gap: A Comparative Literature Analysis of Private Sector and Public Sector
(Department of Business Management Wayamba University of Sri Lanka, 2023) Deepal, A.G.; Jayamaha, A.
The Audit Expectation Gap (AEG) issues are steadily expanding around the globe, irrespective of the particular sector involved. A comparative analysis will be more crucial for the AEG literature since the significance of the expectation concerns stems from the concepts of "stewardship and public accountability", which are applicable to audits in both private and public sectors. Thus, the purpose of this study is to analyze the similarities and distinctions between the AEG studies conducted pertaining to the private and public sectors. This research is directed by theoretical considerations and arrives at conclusions based on the extant literature. An exhaustive search of the published literature was conducted by applying the search terms “expectation gap” and “audit expectation gap” combined with “public sector”, “government sector” and “performance audit” in the Google Scholar search engine and three databases of Scopus, Jstor, and Emerald were performed separately and independently for each sector from 1970 to 2022. Thus, only the articles published in reputable journals concerning the AEG were selected after applying some selection criteria. It was found that the research contexts, selected target populations, and the dimensions applied to assess AEG were found to be significantly different, despite the fact that the definitions and statistical techniques used were found to be comparable in both sectors. This comparison study opens up a wealth of doors for conducting further research in the future.
Impact of Dividend Announcement on Share Prices of Listed Public Quoted Companies on ASPI in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, 2021) Rupasinghe, N.N.; Deepal, A.G.
The impact of dividend announcements on share prices has become a contentious issue in the extant literature over the years since it has not been sufficiently investigated. Further, it is evident that different results have been found in different studies. Hence, the objective of this research is to investigate the impact of dividend announcement on share prices and the informational content of dividend announcement pertaining to the listed companies in Sri Lanka. A sample of 15 companies from ASPI was selected on purposive sampling method for the study. The daily closing stock prices and published first and final dividend announcements data for the period from 2014 to 2018 were used as the dependent variables and independent variables respectively. The standard event study method was employed as the methodology. The Ordinary Least Square Regression Model was used to ascertain alpha (α) and beta (β) of sample companies for event window for the years of 2014-2018. Subsequently, the Market Model was applied to compute the Excess Returns, Abnormal Returns, and t-values surrounding the testing period. The findings confirmed that t- values of Average Abnormal Returns on days for year of 2014-2017 were statistically significant at 5% except for the AARs on days in 2018. Finally, the dividend announcement also showed a substantial impact on share prices based on the descriptive analysis of overall years from 2014 to 2018. Thus, the conclusion of the study reveals that the dividend announcement leads to a positive market reaction by supporting the signaling theory. Furthermore, the results show that dividend announcement has informational content whereas dividend announcement is perceived as favorable news by the investors. This study may specially be useful to prospective investors to make decisions aligning with the dividend announcement pertaining to the listed corporate firms in Sri Lanka. Finally, this study recommends expanding event window or time period pertaining to further studies.
A Synthesis towards the Construct of Public Sector Audit Expectation Gap: A Review of the Literature
(Faculty of Graduate Studies - University of Kelaniya, Sri Lanka, 2021) Deepal, A.G.; Jayamaha, A.
Due to the overwhelming high frequency of corporate failures and governance concerns, the bankruptcy and winding up of corporations in recent years, the public has come to believe that auditors are not executing their responsibilities properly. As a result, the gap between expectations and reality continues to increase day by day. The accounting scandals that affected Enron and WorldCom, followed by the subsequent and recurrent financial crises in organizations, exacerbated this expectations gap even more. Thus, there is a perception gap between auditors and financial statement users, and it is commonly acknowledged as the Audit Expectation Gap (AEG) in the auditing literature. It is claimed that most of the studies on AEG have focused on the private sector, with little or no attention paid to the public sector. Since the auditing process is closely similar in both sectors, it is crucial to investigate whether there is a discrepancy in audit expectations in the public sector. Moreover, there is a dearth of literature-based conceptual studies pertaining to AEG in public sector perspectives. Hence, the main objective of this paper is to construct a new synthesis of the existing knowledge pertaining to the public sector AEG as discovered by numerous scholars around the world. Furthermore, this literature review also encompasses definitions and meanings of AEG, various dimensions used to measure AEG, the target groups involved in exploring AEG, research methods used in empirical studies, and investigations into the causes and mechanisms to narrow down the gap recommended by numerous scholars. This study is driven by theoretical pre-considerations that pursue a straightforward process, and it leads to conclusions derived from the reviewed literature. Thus, to examine the relevant literature, only the research articles published in reputable journals on the AEG were utilized for gathering publications and establishing the research area of inquiry. However, due to a lack of AEG-related journal publications pertaining to the public sector, conference papers and published PhD theses were also selected. The keywords, namely "audit expectation gap in the public sector", "audit expectation-performance gap in the public sector", and "government sector audit expectation gap", were used to search relevant publications in the Google scholar search engine and five other databases, namely Scopus, EBSCOhost, Emarald, Taylor & Francis, and JSTOR from 1974 onwards. The concept of AEG was found to be a multidimensional concept in and of itself. The outcome was that diverse studies came up with a variety of potential explanations for the AEG, as well as a variety of suggestions for mechanisms to narrow down the AEG found in the literature. Furthermore, the samples employed in prior research on the AEG were extremely different, and no one group has been specifically targeted. Subsequently, a fresh but more straightforward definition was generated pertaining to the public sector because of a comprehensive review of literature, adding novelty to the extant literature. Finally, the importance of AEG in the public sector was highlighted, and suggestions for further research were made.