6th ICARE 2020
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/21993
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Item Impact of Risk Governance Practices on Financial Performance of Listed Banks, Finance Companies and Insurance Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Ramasinghe, D.S.E.; Kawshalya, M.D.P.This study investigates the impact of risk governance practices on financial performance of listed banks, finance and insurance companies in Sri Lanka. Basically, when considering the performances of banks, finance and insurance companies, they will have to make changes to their risk governance to guide all employees and teams to achieve specific targets and increase their profitability. Even though these companies have to pay more attention on the risk governance practices for an effective progress, there were some cases in Sri Lanka that had unfortunate track records as some of those institutes have been collapsed which led the society suffer the whole economy. This study aims to provide an original insight into risk governance variables that affect the financial performance of listed banks, finance and insurance companies of Sri Lanka by analysing the risk governance practices and to which extent those risk governance practices have made an impact to financial performance. Sample of the study is selected as the 71 companies from the sectors, banks (10), finance companies (49) and insurance companies (12). Since the independent variable of this study is “risk governance”, to measure the variable researcher has used an already developed comprehensive Risk Governance Index (RGI) by Mostafa Kamal Hassan (2009). This study will carry significant importance for risk managers, bank executives, regulatory authorities, policy makers and future researchers. Specially when analysing developing tools for banks, finance companies and insurance companies this study will be more of use to help management discern difficultto-see risks and to improve response speed of their financial performance.Item Impact of IFRS Adoption on Financial Ratios Evidence from Materials and Capital Goods Sectors in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Madhushankha, J.; Kawshalya, M.D.P.In preparing their financial statements, the companies listed on the Colombo Stock Exchange (CSE) were mandated to adopt International Financial Reporting Standards (IFRS/SLFRS) with effect from 01 January 2012. Sri Lankan companies were reporting under the Sri Lanka Accounting Standards (SLAS) prior to the introduction of IFRS. The objective of this study is to investigate the impact of the adoption of IFRS on the key financial ratios of the materials & capital goods sectors of Sri Lanka. The sample consist of 30 companies listed in the CSE during the six years from 2009 to 2014 under material and capital goods sectors. To gather data for the analysis, audited financial statements were used. This analysis compares pre-adoption ratios under SLAS with post-adoption ratios in SLFRS to evaluate this impact on financial statements. The findings of the study will provide useful insights to the accounting regulatory bodies in evaluating whether its stated objective of IFRS adoption toward financial statements is being accomplished.Item The Impact of Corporate Governance and Ownership Structure on Financial Performance of Materials Sector Companies in the Colombo Stock Exchange(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Senanayake, S.W.P.S.W.H. A.; Kawshalya, M.D.P.Corporate governance and ownership structure are becoming vital concepts of the organizations for last decades which contribute to the firm performance. This study investigates the impact of corporate governance and ownership structure on financial performance of materials sector companies in the Colombo Stock Exchange (CSE) in Sri Lanka. The findings of previous empirical researches are differ from one to another and this topic is not sufficiently investigated in Sri Lankan context. Therefore this research focuses on the impact of corporate governance and ownership structure on the financial performance of materials sector companies in CSE. The purpose of this study is to investigate the impact of corporate governance and ownership structure on financial performance which is measured by the Earning per Share (EPS) of materials sector companies. Number of board directors, number of non-executive directors, number of family directors and CEO duality are used as corporate governance variables and percentage of individual ownership, institutional ownership, resident ownership and non-resident ownership are used as ownership structure variables. The study uses secondary data of 20 materials sector companies in Colombo Stock Exchange (CSE) of Sri Lanka covering the period of 2011/2012 to 2018/2019. Data will be analyzed using a multiple regression model. The findings of this study will be important for managers and investors. Potential and existing investors may use the findings to propose better corporate governance and ownership practices as well as managers can use the findings to design corporate strategies and make investment decisions in the areas of profit goals.Item The Impact of Company Performance on Chairman’s Statement(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Rosa, S.J.S.; Kawshalya, M.D.P.Accounting information are getting increasingly important in external reporting. The chairman's statement usually occupies a prominent place in the annual report and provides information beyond what is required for statutory financial reporting. It is a recognized fact that those who arrange corporate annual reports have important motivations to exercises the content of Chairman Statements. This study tries to identify is there any different pattern between how most profitable and the least profitable companies report their organizational information in the chairman statement. There are prior studies related this topic in different developed countries. In Sri Lanka, Chairman Statement is mandatory requirement of annual report whereas no any evidence of prior research regarding chairman statement in Sri Lankan content. Accordingly, this research investigates the relationship between financial performance and chairman statement textual characteristics in Sri Lankan Content. Impression management is given motivation for poorly performing management to report their performance. This study is trying to identify whether companies chairman statement reporting strategies depend on underlying financial performance. The research question is investigated by examining a range of textual characteristics in the chairman’s statements of 20 extremely profitable and 20 extremely unprofitable Sri Lankan listed companies. Since, Chairman’s statement is one of most widely read section of annual report, this study will provide an understanding and gridlines to the stakeholders who make decisions regarding organizations by reading chairman’s statement.Item Stock Market Reaction to Auditor Opinion(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Pieris, H.T.D.; Kawshalya, M.D.P.The audit report is the medium of communication between the auditor and the users of the audit report, this report must be understandable, objective, and accepted by the users as a relevant source of information. Therefore, this research focuses on identifying the impact of auditor’s opinion on the share prices of listed companies in Sri Lanka. Due to the importance of the research area, in every region in the world, studies have taken place. However, results include certain contradictory conclusions. Therefore, the Sri Lankan capital market, CSE is an ideal research site to conduct an investigation to find out whether the information content on the auditor’s report does have an effect on an investor’s decision-making process. Accordingly, the purpose of this study is to investigate the impact of audit qualification on the share prices of listed companies in the CSE, untested market, and environment to test whether the value relevance of information content of the quailed audit report exists. To test the hypothesis, the short event study methodology, which is focusing on short event window was used to determine the market reaction to audit qualifications. The sample consisted with 40 firm-year observations from 30 unique companies listed in Colombo Stock Exchange between 2015 to 2019. It has been considered only the first-time audit qualifications to test the impact of new information. This study is expected to be important to the audit profession, investors, creditors, and other general users, as it is expected to provide them with useful information. Further, makes it possible to identify the investor's reaction over audit qualifications and evaluate the speed of response.Item Impact of Institutional Ownership on Value Relevance of Accounting Information in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Maheshika, G.A.R.; Kawshalya, M.D.P.The value relevance of accounting information has received significant attention in both developed and developing countries for lase few decades. This study investigates the impact of institutional ownership on value relevance of accounting information in Sri Lankan context. There are only few prior studies have conducted to assess the value relevance of accounting information and influence of institutional ownership level in Sri Lankan context. Further, those studies haven’t considered how it might be affected by firm level characteristics such as institutional ownership, growth, firm size, firm industry, leverage and governance. Therefore, this study tries to fill this research gap by assessing the impact of institutional ownership and other firm specific characteristics on value relevance of accounting information. This study employs Ohlson (1995) price regression model to investigate the value relevance of accounting information. It explains Market Price per Share (MPPS) using earnings per share (EPS), book value of per share (BVPS), institutional ownership level, growth in assets, changes in financial leverage and firm size. The sample comprises 35 firms and 175 firm-year observations constitute to list manufacturing in CSE. This study will use a panel regression model to estimate model. The finding of this study will promotes the understanding of the influence of institutional investors on firm’s market value. Further this study can serve as a guide for accounting researchers studying other emerging markets. Capital market regulators can provide guidelines in the form of information characteristics and elements of financial statements that need improvement and enhance the quality of accounting information by identifying the strengths and weakness in their financial reports.Item The Impact of Audit Committee Characteristics on Integrated Reporting Practices – Evidence from Listed Banks in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Hafsa, M.H.F.; Kawshalya, M.D.P.Integrated reporting is the latest form of corporate reporting that promotes more integrated and transparent information about an entity. The integrated reporting can vary based on the audit committee characteristics and this study investigates the impact of audit committee characteristics on integrated reporting practices in banking industry in Sri Lanka.There are many prior researches which provide evidence on the impact of audit committee characteristics on firm performance. But only less amount of researchers are focused on the relationship between audit committee characteristics and integrated reporting practices. As well prior studies’ findings are not in a conclusive manner. Therefore this study afford a better understanding about the impact of audit committee characteristics on integrated reporting practices. This study mainly focuses on the individual impact of audit committee characteristics on the integrated reporting practices. The sample picked from the listed banks in Colombo stock exchange in Sri Lanka, which composed by 16 listed banks and for the period of 2014-2019. The data was collected through the annual reports which include integrated reports. The state of integrated reporting for each banks for each year is computed by scoring model. This study uses a panel regression model to estimate model. The findings of the study will provide useful perception relating to the integrated reporting practices. Moreover, the results will be interest to all the listed banks in Sri Lanka stock exchange, investors, other interest parties about the integrated repotting practices and recent trends in Sri Lanka.Item Impact of IFRS Adoption on Audit Cost(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Fernando, K.D.M.; Kawshalya, M.D.P.Regulators and standard setters claim that International Financial Reporting Standards (IFRS) enhance the comparability and quality of financial reporting. However, the true returns to IFRS adoption should be evaluated by trading off the costs of transition and any recurring costs of reporting against the recurring benefits of comparability and increased reporting quality. This study investigates the impact of adopting IFRS on audit fees of manufacturing companies in Sri Lanka. There are many researches conducted on IFRS, but few researches which are directly concerned with the costs of IFRS adoption focusing on audit fees whereas no research was found in Sri Lankan context. Moreover, this study provides a better insight on the relationship between disclosure and regulatory environments and audit fees within a single country setting, which brings a better understanding on the audit fee formation. Accordingly, the purpose of this study is to investigate the impact of IFRS adoption on audit fees in listed manufacturing companies Sri Lanka, by comparing audit fees in pre- and post-IFRS adoption periods. This study employs a model introduced by Emmanuel T. De George, Colin B. Ferguson, Nasser A. Spear (2013) to investigate the relationship. The pre-IFRS period is designated as 2009 through to 2012, and the post-IFRS period is designated as 2013 through to 2019. The sample comprises all 30 firms listed in Colombo Stock Exchange under manufacturing sector. The secondary data extracted will be analyzed using the multiple regression technique in order to test the formulated hypotheses. The findings of the study will provide useful insights to the accounting regulatory bodies in evaluating cost of IFRS adoption. And also, this will be helpful to standard setters, companies, auditors and future researchers as well.