Accountancy

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Author: search.filters.author.Perera, PrabathStart date: 2020

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    Audit Quality: Perception of Audit Practitioners in Sri Lanka
    (17th International Conference on Business Management (ICBM 2020), Colombo, Sri Lanka, 2020) Perera, Prabath; Wijerathna, A.G.H.S.K.
    The quality of the audit plays an important role in the financial markets as a factor which creates the investor confidence is auditor’s opinion on the financial statements. Number of companies collapsed globally and as well as locally as a result of allegations made by employees of those companies. However, the audit report of these companies did not address any problems which were existed in the companies. Therefore, it is questionable whether the quality of audits is achieved. A standardized audit quality framework does not exist in Sri Lanka to measure audit quality. The Institute of Chartered Accountants of Sri Lanka (ICASL) has issued Sri Lanka Standard on Quality Control (SLSQC) to maintain the audit quality in Sri Lanka. However, it is not sufficient to measure the audit quality. In most of the developed countries, a separate audit quality framework exists as a guide to measure the audit quality. In the absence of such a framework, this study is aimed at examining the perception of junior level auditors on the audit quality indicators and how they prioritize audit quality indicators in order to enhance the audit quality. In order to achieve this objective, a questionnaire was developed and distributed among 120 junior-level auditors who work at Audit Firms in Sri Lanka. A total of 76 responses were able to obtain. The data was analysed using descriptive statistics. As per the results of this study, the factor which has a significant effect on the audit quality is the mental/ psychical status of the auditor. Moreover, the results also suggest audit engagements carried out based on the ethical standard rather than based on the legal standard has an effect on increasing the quality of the audits performed. Further, the perception of the junior level auditors differs based on the gender, academic qualifications and position in the firm for certain audit quality indicators. Based on the results of this study it can be recommended to adopt a new audit quality framework by the government relevant governing bodies to enhance the audit quality in Sri Lanka.
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    EFFECT OF DISCRETIONARY ACCRUALS ON FIRM’S CORPORATE DIVIDEND POLICY - EVIDENCE FROM SRI LANKA
    (3rd International Symposium on Social Sciences and Humanities 2020 , Colombo, Sri Lanka, 2020) Lakshan, R.P.S.; Perera, Prabath
    Earnings management is becoming an area of interest to many stakeholders including researchers, after several accounting scandals. Also, it is an important duty of a financial manager to formulate the company's dividend policy that is in the best interest of the company. The study aims to identify the impact of earning management measured through discretionary accruals on dividend policy of listed companies in Sri Lanka. The study uses annual data of 57 non-financial companies listed in Colombo stock exchange representing five sectors based on highest market capitalization during the period from 2015 to 2018. Discretionary accruals (DA) were used as a proxy for earnings management which is obtained from cross-sectional modified Jones (1995) model while dividend payout ratio is taken as a proxy for dividend policy. Firm Debt (DEBT), Liquidity (LIQ), Operating Cash Flows (CFO), Return on Equity (ROE) and firm Size (SIZE) have been introduced as control variables to make model strongest. The data were analyzed using correlation and regression analysis. The results reveal that discretionary accruals have negative impact on the dividend payout policy of Sri Lankan companies listed in the Colombo Stock Exchange. In addition to that LIQ, ROE, CFO show positive significant impact on the dividend payout while DEBT shows insignificant impact on the dividend payout policy of Sri Lankan Companies. In an environment whose reported earnings are viewed with some extent of skepticism, cash dividends will provide a strong signal to investors of true financial strength and of the credibility of earnings reports.
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    Impact of firm characteristics on intellectual capital disclosure: Evidence from Sri Lanka
    (6th International Conference on Contemporary Management (ICCM 2021), Jaffna, Sri Lanka., 2021) Herath, Malinda N.; Perera, Prabath
    This study aimed to investigate the relationship between firm characteristics and intellectual capital disclosure. Intellectual capital reporting is mostly unregulated in Sri Lanka, due to the fact that it is voluntary disclosure. In the recent past, there has been a growing dissatisfaction with traditional financial reporting. Further, Intellectual Capital (IC) performs an increasingly more important position in sustaining competitive advantages and creating corporate value for a corporation. Therefore, there is a strong need to study whether firm characters influence the extent and variety of disclosures presently made by the firms in Sri Lanka. The dependent variable in this research is intellectual capital disclosure and it is measured by the content analysis method. The Content analysis is supported by a disclosure index that measured a variety of intellectual capital disclosure. The independent variables in this research are firm characteristics, firm size, leverage, industry type, and auditor type. Data were collected from the annual reports of 197 non-financial firms listed in the Colombo Stock Exchange (CSE) for three years from 2016/2017 to 2018/2019 and data was analyzed by using EViews 11 statistical package. This study used descriptive statistics, correlation, and regression analysis to find out the association between independent and dependent variables. The results of regression analysis suggested that firm size (FS) and auditor type (big four audit firms) are the key contributors in determining the level of intellectual capital disclosure in the annual reports of the firm. The findings of this study have implications for policy makers and particularly for firm characteristics developments in Sri Lankan non-financial firms and, the study has implications for Sri Lankan firms and stakeholders and investors.