Browsing by Author "Kaushalya, M.D.P."

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Change Driven to Success Case Study on Screenline Holdings (Pvt) Ltd, Sri Lanka
(Staff Development Unit, Faculty of Commerce & Management Studies, University of Kelaniya, 2015) Rathnasiri, U.A.H.A.; Rajapakse, R.M.D.A.P.; Perera, H.A.P.L.; Aruppala, W.D.N.; Kaushalya, M.D.P.; Thilakarathna, W.D.N.; de Silva, N.M.T.; Kumara, N.
Our desire in writing Change Driven to success was to provide faculty with a developed teaching package that allows them to enhance students’ learning and application of knowledge in business management. Appropriate use of theory and the acquisition of factual content and analytical skills are also important goals, but the main objective is to improve the ability of handling different types of managerial problems and opportunities intelligently. This case study book depicts a wide range of business management applications specially focusing on Entrepreneurship Development, Strategic Management, Management and Financial Management etc. Sufficient information is given in each module to support students in analyzing and decision making. The Change Driven to success reflects on the identified structural change in Screenline Holdings (Pvt) Ltd. which is one of the Sri Lanka’s largest screen printers and embellishers. This book comprises with five modules and each module ends with a contribution to practice to assist students in combining theoretical aspects with emerging workplace realities. This case study book submitted in partial fulfilment of the requirement for Staff Development Programme, Faculty of Commerce and Management Studies, University of Kelaniya conducted for Probationary and Assistant Lecturers.
Detecting the probability of financial statement fraud due to earnings manipulation -evidence from listed companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Wijesuriya, M.W.A.D.T.R.; Kaushalya, M.D.P.
This study aims to investigate the probability of detecting financial statement fraud due to earnings manipulation in listed companies in Sri Lanka. Fraudulent financial reporting is one of the emerging topics in Sri Lanka in recent years and it made a huge noise about fraudulent financial reporting due to the large fraud cases happening in Sri Lanka. Companies will always try to find ways to prettify their financial statements and their earnings potential to appeal to all stakeholders. On the other hand, users of financial reports are worried about the truthfulness and fairness of financial statements. Current study tries to examine whether companies which are listed on the Colombo Stock Exchange would have engaged in earnings manipulation from the period from 2016 to 2021.This research uses Benish M-score Model which is a mathematical model as the methodology for reach the conclusion of this research. This research consider all listed companies in Colombo stock exchange in Sri Lanka during the period of 2016- 2021as the sample. According to the Sri Lankan context there is no significant study that has examine the probability of financial statement fraud due to earnings manipulation in all listed companies in Sri Lanka. This study provides valuable outputs relating the truthfulness of the financial statements of listed companies during the covid 19 outbreak.
The Effect of Company Characteristics and Auditor Characteristics to Audit Report Lag
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Gunathilaka, M.A.N.N.P.; Kaushalya, M.D.P.
The research aims to investigate the impact of company-specific attributes and auditor-specific features on audit report timeliness, filling a critical gap in the current academic literature. The study focuses on the relationship between company and auditor characteristics and the determinants of audit report lag. The research design includes a systematic framework for data collection and analysis, ensuring the required information is obtained to address the research questions. The thesis structure consists of five chapters, covering the literature review, research design, empirical models, methodology, and data analysis. The literature review explores the theoretical and empirical foundations of audit report lag, including Agency Theory, Compliance Theory, and Capital Structure Theory. The result shows that audit committee effectiveness and profitability had a significant negative impact on audit report lag. while accounting complexity had a significant positive impact on audit report lag. Meanwhile, financial condition, company size, audit fee, and auditor reputation did not show a significant influence on audit report lag.
Factors Affecting the Adoption of Computer-Assisted Audit Techniques in Sri Lanka: The External Auditor’s Perception
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Zuhair, M.N.M.; Kaushalya, M.D.P.
This study focuses on the adoption of Computer Assisted Audit Techniques (CAATs) by external auditors in Sri Lanka, including auditor’s perception and factors that influence their adoption. The study uses the Unified Theory of Acceptance and Use of Technology (UTAUT) as a theoretical framework to investigate the impact of four main dimensions on auditors' intention to use CAATs: performance expectancy, effort expectancy, social influence, and facilitating conditions. Data was collected through a survey from a convenience sample of 100 auditors employed by Sri Lanka's big four audit firms. The data was analyzed using a regression model and SPSS software. The findings reveal that all four independent variables have a significant and positive impact on auditors' intention to adopt CAATs. The most significant factor was found to be the Facilitating Condition, followed by Social Influence, Performance Expectancy, and Effort Expectancy. Notably, Effort Expectancy had a lower impact on CAAT adoption. The findings will help to improve the acceptance of CAATs. Understanding auditors' perceptions of CAATs can lead to more efficient and timely audits, enhanced service quality, cost savings, up-to-date policy development, and strategic advantages for firms aligning their technology strategies. Further, this study is truly relevant for practitioners to understand how to adopt and use CAATs in their auditing process and what factors should be considered before implementing CAATS.
The impact of corporate governance on preventing the likelihood of fraudulent financial reporting: evidence from listed companies in Sri Lanka.
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Siriwardene, K.Y.U.; Kaushalya, M.D.P.
Being a developing nation, the financial reporting quality of businesses have become extremely important to attract investments specially in the listed companies in Sri Lanka. On the other hand, financial reporting fraud causes financial reporting quality to decline, which undermines stakeholder confidence and is a known key factor in the formation of significant financial crises. Hence it is important for the development of efficient fraud detection and prevention techniques for the accuracy and transparency of financial reporting to regain the stakeholders' trust. A strong defense against corporate fraud is provided by strong corporate governance for the businesses which is the main purpose of this study to see the impact of corporate governance and its mechanisms on preventing the likelihood of fraudulent financial reporting. The existing literature shows both negative and positive impacts and the current study is expected to see that the existing results will be the same for the Sri Lankan context which is wished to analyze by taking all the Colombo stock exchange listed companies except for banks, diversified financials, and insurance companies for the years from 2017 to 2021. The Beneish M score model is used to quantify fraudulent financial reporting and nine independent variables are expected to test using a linear regression model. Descriptive statistics, correlation analysis and panel regression analysis are used to analyze the data. Accordingly, the findings of the study are important in preventing fraudulent financial reporting and reducing its negative consequences to achieve the goals of the companies. And also, the results of this study will inevitably enhance investor confidence which will help to make more informed decisions.
The impact of earnings management on dividend policy with the moderating effect of corporate governance evidence from listed companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2022) Hewavitharana, N.D.; Kaushalya, M.D.P.
This study is conducted to examine the impact of earnings management on dividend policy with the moderating effect of corporate governance of listed companies in Sri Lanka. Dividend policy is a widely addressed topic in financial management. An important duty of the financial manager is to prepare the dividend policy of the firm in the best interest of the company. Many financial managers engage in earnings management practices with the objective of adjusting dividends. This study investigates the manifestation of earnings management in all the listed companies listed at the Colombo stock exchange and tests the impact of earnings management on dividend policy with the moderating effect of corporate governance. This study selected 50 companies with the highest market capitalization as the sample of the study. Feasible generalized least square regression analysis is used as the main tool of analysis in this study. Dividend policy is measured via the dividend payout ratio while earnings management is measured using the modified johns’ model. In addition ownership concentration, board size, expertise of audit committee members and CEO duality are the moderating variables of this study. The study contributes to the existing literature as the first attempt to investigate the impact of earnings management on dividend policy with the moderating effect of corporate governance in the Sri Lankan context. These findings are important for the researchers specializing in the field of finance and accounting and for the standardization bodies and for the practitioners in their decision-making process.
The Impact of Entity Specific Factors on External Audit Fees of Listed Non-Financial companies in Sri Lanka
(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Arasara, M.H.P.; Kaushalya, M.D.P.
Limited liability companies in Sri Lanka are statutorily required to secure the services of an auditor in order to obtain a professional opinion on their financial statements. The usefulness of an external audit in enhancing the credibility of financial statements depends on the quality of audit services being provided. This study sets out to examine the factors that may influence external audit fees paid by the Sri Lankan nonfinancial companies listed on Colombo Stock Exchange (CSE). Specific attention is focused on the investigation of the potential influence of corporate size, profitability, corporate risk, corporate complexity, sector classification, external audit report lag, audit committee independence, status of the audit firm on audit fees. Data used in this study are mainly collected from 2013 until 2017 annual reports published by the Sri Lankan non-financial companies listed on Colombo Stock Exchange. The sample which contains 50 numbers of companies and total observation is 250. Data were analyzed using regression model with an ordinary least squares (OLS) technique over E-Views package. The findings pointed that there is a significant and positive association between audit fees and each of corporate size, company’s profitability, risk and audit committee. A significant and negative relationship has been detected between business complexity and external audit fees. The findings also revealed that audit fees are not significantly associated with, industry type, status of audit firm and audit report lag
Impact of IFRS Adoption on Financial Ratios: Evidence from Listed Manufacturing Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, 2021) Rajapaksha, R.A.S.; Kaushalya, M.D.P.
With the emerging trend of developing global businesses around the world instead of setting up businesses restricted to one geographical boundary, the need of having a common set of financial reporting standards became much needed to enable the users of financial statements to make consistent decisions. In response to this, International Accounting Standard Board (IASB) introduced International Financial Reporting Standards (IFRS) which led Sri Lanka also to adopt IFRS compatible Sri Lanka Financial Reporting Standards in 2012. Accordingly. This study investigates the impact of IFRS adoption upon the key financial ratios of listed manufacturing sector companies in Sri Lanka. The data were collected for the period of eight years from 2008/2009 to 2015/2016 by using annual reports published on the Colombo Stock Exchange (CSE). The total sample period is divided into two-part as pre-IFRS & post IFRS adoption periods for comparison. The ratios which are selected for the analysis were current ratio, earning per share, debt to equity ratio & return on equity ratio. The findings of the study suggested that there is a significant difference between the ratios that were current and earning per share, calculated as per previous local accounting standards and as per IFRS. The impact was not found to be significant for the debt-equity ratio and return on equity ratio. The IFRS adoption is more likely to exhibit a favorable impact on financial statements. This study adds new knowledge to the existing literature of IFRS adoption since the data used are more recent than most IFRS studies around the world and the study focuses on the content of developing countries while most of the other studies have been carried out in the context of developed countries.
The Impact of Internal Audit on Financial Performance of Commercial Banks in Sri Lanka
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Pushpamali, E.N.A.; Kaushalya, M.D.P.
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. When banks do operations without considering Internal audit assurance, banks are unable to utilize their objectives as desired. The study aims to identify how the internal audit influences the financial performance of commercial Banks in Sri Lanka. Internal Audit Standards (IAS), Professional Competency (PC), Internal Controls (IC), and Independence of Internal Audit (IIA) were used as internal audit indicators while Financial Performance was used as the dependent variable. The study administrated survey questionnaires to executives from both finance and internal audit departments to collect primary data while secondary data was obtained using annual financial statements of 12 listed Commercial Banks. Data were analyzed using regression analysis and SPSS packages. From the findings, the study concludes that IAS, PC, and IC have a positive relationship with the financial performance of commercial banks and IIA has no significant impact on financial performance. The study found that a unit increase in IAS, IIA, PC, and IC would lead to an increase in the ROA of commercial banks. This recommends that commercial banks should adopt impactive internal audit practices to enhance the financial performance of the banks.
The Investigation of the Audit Expectation Gap in Sri Lanka Among Auditors and Users (Managers and Undergraduates)
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Sihnas, M.S.F.; Kaushalya, M.D.P.
This paper examines whether an audit expectation gap exists among the auditors and users of financial statements in Sri Lanka concerning the auditors’ responsibilities, the reliability of audits and audited financial statements, and the usefulness of the audited financial statements. Undergraduates and Finance managers in Banks have been selected as the participants of the users of the financial statements in the study. To achieve the research objective, the study collected data using a structured questionnaire through primary sources. The collected data was analyzed using the statistical software SPSS, version 22. The study used descriptive statistics and the Mann–Whitney U test for the analysis of data. The normality of distribution was tested using Kolmogorov–Smirnov Z test. The results confirmed that an audit expectation gap exists in Sri Lanka and the highest expectation gap was detected concerning the auditors’ responsibility for fraud prevention and detection, auditors’ responsibility for the soundness of an entity’s internal control system, and the auditor's exercise of personal judgment in the selection of audit procedure. Results indicate a slight audit expectation gap in the reliability of audited financial statements no audit expectation gap was found in the usefulness of the audited financial statements. The study recommends improving the communication between auditors and users of the audit reports and educating the users about the scope of an audit and its functions.
The Macroeconomic Factors Affecting Exchange Rate: Analysis of the ARDL Model
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Risan, M.A.M.; Kaushalya, M.D.P.
This research project, titled "The Macroeconomic Factors Affecting Exchange Rate - Analysis of the ARDL Model," presents a comprehensive review exploring the intricate relationships between macroeconomic variables and exchange rates in the context of Sri Lanka. The investigation covers key independent variables, including interest rates, inflation rates, budget deficits, earnings from tourism, and capital flows. The Auto Regressive Distributed Lag (ARDL) model serves as the analytical framework. The research meticulously examines the dynamics of interest rate changes, inflation, and budget deficits in Sri Lanka. It analyzes the impacts of unconventional monetary policies and suggests the need for a deeper understanding of the influence of technology on tourism-related dynamics. The study also calls for a more nuanced examination of government spending's diverse effects on exchange rates and proposes a thorough analysis of geopolitical issues affecting capital flows. Research papers related to interest rates delve into the effects of low and negative interest rates on Sri Lanka's economy and the determinants of interest rates in the country. Papers exploring inflation scrutinize its impact on economic growth, while another investigates the relationship between monetary policy and inflation. Studies on budget deficits examine their connection with economic growth and inflation. Papers on earnings from tourism elucidate the sector's contribution to economic growth, emphasizing political stability as a vital factor. The research on capital flows, particularly foreign direct investment (FDI), examines their role in economic growth and exports. While highlighting the project's contributions, the literature review identifies critical research gaps. It suggests exploring the effects of unconventional monetary policies, technological advancements in tourism, diverse government spending, and geopolitical uncertainties on exchange rates. Addressing these gaps will enhance the project's depth and relevance, providing valuable insights for businesses, investors, and policymakers navigating the complex global economic landscape.
The Management Perception on the Effectiveness of Accounting Information Systems in Sri Lankan Banks
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Rashmi, P.K.Y.; Kaushalya, M.D.P.
The purpose of this study is to investigate the extent of accounting information systems effectiveness in Sri Lankan Banks. Today, organizations are trying to increase their investments in information technology tools to enhance their efficiency, effectiveness, and their overall performance. Therefore, an effective accounting information system helps managers of organizations to make suitable and informed decisions. Effective accounting information systems should ensure that all levels of management get sufficient, adequate, relevant, and accurate information for their day-to-day operations. Banks should have effective accounting information systems since Banks play a critical role within the Sri Lankan financial system. This study aims to examine the extent of accounting information systems effectiveness in Sri Lankan Banks in terms of responsiveness to the management requirements of the functions of planning, observation, and decision-making. This research was carried out by quantitative methodology as the research design, to collect primary data, 45 questionnaires were distributed to 30 Sri Lankan banks. The statistical package for social sciences (SPSS) program was used to analyse and examine the hypotheses of this study. The results of the study emphasized that when compared to the planning and observation process, accounting information systems are more effective in meeting the management requirements of the decision-making process. From the findings of this study, it is recommended that continuous improvement of accounting information systems reflects positively on banks administrative jobs namely planning, observation, and decision-making process.
Perception of External Auditors on Fraud Risk Indicators
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Perera, K.A.S.; Kaushalya, M.D.P.
This study explores the complicated context of how fraud risk indicators are perceived by external auditors, with the goal of identifying important risk indicators and examining possible demographic implications on these perceptions. By revealing how auditors individually rank 25 various risk indicators which range from internal control attitudes to market dynamics the study fills an important gap in the literature. The study investigated whether auditors' viewpoints and the relative weight given to various fraud risk indicators are influenced by demographic factors such as gender, experience, job title, and firm type. Using a descriptive research approach, the study gathers information from 88 respondents, a broad sample of 100 external auditors, via a structured questionnaire. With 42 male and 47 female auditors, the demographic breakdown shows a diversified group with a range of experience levels and job titles. To find trends in auditors' impressions and demographic differences, statistical studies are used, such as descriptive statistics and inferential tests. Major findings show how auditors prioritize fraud risk indicators in an advanced manner, illuminating various points of view influenced by demographic variables. The main findings show that the Management's influence over the control environment has been selected over the industry conditions and operating and financial stability characteristics by external auditors, and the experience is the only demographic factor that affects the perception of external auditors. The study provides insightful information about the complex interactions between the characteristics of individual auditors and their methods for risk assessment. This research contributes vital knowledge to auditing, aiding in the refinement of risk management strategies. strengthening financial systems against fraudulent activities is possible because of the identified major red flags and their well-considered prioritization, which have practical implications for auditing procedures, training initiatives, and policy formulation.
Student’s Perception of the Auditing Profession in Sri Lanka: The Effect of Proximity and Knowledge on Auditor’s Stereotype
(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya Sri Lanka, 2023) Diwyanjali, T.D.U.; Kaushalya, M.D.P.
The purpose of this study was to identify the correlation between proximity, knowledge, and information sources related to the auditing profession and among students in Sri Lanka. Using quantitative methods, data were collected through a questionnaire survey administered to a group of 90 undergraduate students. Statistical analyses were performed using SPSS software to clarify the interrelationships between these factors. The results show that students acquire knowledge about the auditing profession mainly through their academic training. Furthermore, students view the auditing profession as inherently attractive, offering significant prospects for career advancement, carrying a variety of responsibilities, and making significant contributions to society. In addition, students view auditing as a meticulous activity that demands a high level of responsibility. Moreover, the findings emphasize that auditors are perceived as highly competent and ethical professionals. This empirical investigation contributes significantly to the academic discourse, providing insights into the impact of proximity, knowledge, and information sources on students' perceptions of auditing. The practical implication of this research suggests that a high level of understanding of a career positively affects students' perspectives on that particular career.