6th ICARE 2020
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/21993
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Item Impact of Firm Characteristics and Corporate Governance Variables on Internet Financial Reporting: Evidence from Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Samarathunga, S.L.M.D.H.G.; Wijekoon, W.M.H.N.In the modern era with the rapid growth of internet technology, it has enables the companies to disclose financial and non-financial information to the stakeholders through the adoption of websites as a media of communication. The objectives of the study are therefore, to examine the extent to which Internet Financial Reporting (IFR) practices are adopted by listed companies in Sri Lanka and to identify the impact of corporate governance practices on the level of IFR adoption. The extent of IFR practices were evaluated based on a comprehensive index consisting of 35 items under the main dimensions of content and presentation. The scores of IFR Indices of companies were analyzed using both descriptive statistics and univariate analysis of one sample t test. Corporate governance practices of the sample companies were assessed in terms of eight individual influential characteristics identified through extant literature and a Corporate Governance Index (CGI) that was developed to capture the effect of all individual corporate governance characteristics identified. The findings of the study reveal that Sri Lanka is still at an embryonic stage in terms of adopting IFR practice, while the concentration on presentation dimension of IFR practices depicts that more attention is deviated towards the format and outlook of the websites at the less importance forwarded towards the content and fullness of the information provided in the websites. This implies that IFR practices in Sri Lanka is not oriented towards the voluntary information dissemination for investors and other interested parties in making economic decisions on behalf of the company such that it does not enlighten the agency problems due to persistent information asymmetry.Item The Impact of Credit Risk Management on Profitability of Financial Institutions in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Kumara, A.A.S.; Wijekoon, W.M.H.N.This study examines the impact of credit risk management on profitability of financial institutions in Sri Lanka. Return on Assets (ROA) used as profitability indicator and Gross Non- Performing Loans (GNPL), Provision for Loss Facilities / Credit Facilities ratio (PLFCF), Capital Adequacy Ratio (CAR) and Total credit interest/Credit facility Ratio (TCICF) are employed as measures of credit risk management. Secondary data were collected from 31 Licensed Finance Companies (LFCs) and 10 Licensed Commercial Banks (LCBs) in Sri Lanka for the period from 2015 to 2019. A series of statistical tests will be performed in order to test the impact of credit risk management on profitability of financial institutions in Sri Lanka. Findings of the study will provide useful insights to decision makers of Licensed Commercial Banks and Licensed Finance Companies to educate about values of Credit risk management. Empirical evidences will provide suggestions for managers of Licensed Finance Companies and Licensed Commercial Banks in Sri Lanka, how to improve the finance company’s profitability by managing the credit risk faced by those financial institutions. Accordingly, they can better organize and assign their resources concerning the situation of credit risks.Item Impact of Environmental Reporting on Corporate Financial Profitability of Public Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Samarakoon, S.M.K.K.E.; Wijekoon, W.M.H.N.Companies disclose information about their environmental performance in response to stakeholder demands of environmental responsibility and accountability. Environmental reporting therefore provides useful information to stakeholders for their decision making. This study investigates the impact of environmental reporting on corporate financial profitability of public listed companies in Sri Lanka. A little research has been available on this area and this study will attempt to fill this existing gap in the literature. This study uses energy and water related disclosers, Biodiversity, Emission, Effluent and waste related and other factors as independent variables and Return on assets as dependent variable. Data will be collected from annual reports published from the Colombo stock exchange as secondary data for the period from 2015 to 2019. This study selected 52 public listed companies using highest market capitalization out of 298 companies registered in the Colombo stock exchange. This study will use a panel regression model to estimate model. The findings of the study will provide useful evidences for stakeholders in order to make decisions. Further, the results will be of interest to investors, customers, employees, regulator bodies such as government, central environment authority.Item Impact of Firm Specific Characteristics on Enterprise Value: With Evidence of Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Ranasinghe, B.A.H.E.; Wijekoon, W.M.H.N.To survive in the modern complex business world, companies must mobilize their strengths to achieve goals and objectives by increasing their corporate value or the enterprise value. This study investigates the impact of firm specific characteristics on enterprise value with the evidence of listed companies in Sri Lanka by spreading all most all the GICS industry groups. Firm specific characteristics such as firm size, growth, capital structure and profitability were used as independent variables. Findings of prior studies provide mixed results and comprehensive evidence is missing relating to phenomena under study. There is a lack of empirical evidence on the impact of firm specific characteristics on enterprise value from Sri Lankan context. This study employs two regression models and explains enterprise value using Tobin’s Q model and another optional regression model. These models explain Revenue Growth by Sales Growth rate, Firm size by total Assets, Capital structure by debt ratio and profitability by ROE & ROA. The sample comprises of 100 companies except those are in the financial Industry groups such as banks, diversified financial institutions and insurance companies. Data are collected for five years from companies’ annual reports, which nearly constitute 17 GICS Industry groups in Colombo Stock Exchange. The findings of the study will provide useful insights to the investors and managers to improve their enterprise value. This study addresses various theoretical stances developed by numerous scholars over last five decades and provides useful insights to the future researches also.Item Impact of Cash Conversion Cycle on Firm’s Profitability with special reference to Listed Beverage Food and Tobacco Industry and Consumer Services Industry in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Palayangoda, I.S.; Wijekoon, W.M.H.N.Cash Conversion Cycle is one of the most widely used measurement to evaluate the risks and returns associated to liquidity management. Every corporate organization is extremely concerned about how to sustain and improve profitability hence they have to keep an eye on the factors affecting the profitability. Therefore the purpose of the study is to identify the impact of Cash Conversion Cycle on profitability of selected Beverage Food and Tobacco companies and Consumer service companies in Sri Lanka. Most of studies are focused to the listed companies in developed countries. Further, there is a less attention to the Beverage Food and Tobacco sector and Consumer Services companies and no previous studies have done a comparison between two sectors. Therefore this study focuses to do a comparison between Beverage Food and Tobacco sector and Consumer Services sector in Sri Lanka to fulfill that gap. The profitability which is the dependent variable of this study measured in terms of Return on Equity and Return on Assets. The Cash Conversion Cycle is determined by Inventory Conversion Period, Debtor Conversion Period, and Payable Conversion Period. The sample includes twenty Beverage Food and Tobacco companies and twenty Consumer services companies and data were collected for the period from 2015 to 2019. In this study, regression and correlation statistical techniques are used to estimate the impact and the relationship between CCC and profitability. Findings of the study will be of interest to stakeholders of the company including managers in making their decisions.Item The Effect of Firm Specific Characteristics on Financial Leverage: Evidence from Listed companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Nanayakkara, S.K.; Wijekoon, W.M.H.N.The study examines the impact of firm specific characteristics on financial leverage of listed companies in Sri Lanka. An analysis of previous research indicates gaps in the literature. Prior research on the subject provides mixed findings and therefore, comprehensive evidence is missing relating to the firm specific characteristics that impact on financial leverage. There appears to be a dearth of literature on the subject in developing and Asian countries and Sri Lanka in particular. Therefore, this study aims to fill this gap in the research by investigating the impact of firm’s characteristics on financial leverage of listed companies in Sri Lanka. Quantitative approach was adopted in the study to find answers for the research questions of the study. firm size, tangibility, profitability, and firm age were used as independent variables and Financial Leverage used as the dependent variable of the study. A fixed-effects regression technique is used to analyses data. The dataset used covers 100 non-financial companies in the Colombo Stock Exchange in Sri Lanka and collected for data for 8 year period from 2012 to 2019. Findings of the study will be useful to policy makers in developing policies on corporate finance and to managers in formulating strategies to increase firm value and performance by considering changes in firms characteristics and its impact on financial leverage. Findings also provide useful insights to managers in determining the capital structure based on firm’s characteristics.Item Impact of Corporate Governance and Audit Quality on Earnings Management: Evidence from Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Hettihewage, L.S.S.; Wijekoon, W.M.H.N.Financial statements are the most important source of information for investor decisions and the most significant variable that attracts attention is earnings of the company. Earnings management is a manipulation tool used by the preparers of the financial information and this has a significant impact on the decision made by the investors. This study examines the impact of Corporate Governance and Audit Quality on Earnings Management in the Listed Companies in Sri Lanka. Several prior studies have examined this relationship in developed countries. However, there is dearth of literature available in the Sri Lankan context. Moreover, the extant literature provides mixed results and therefore, comprehensive evidence is missing relating to the subject. This study contributes to the existing literature by integrating both corporate governance and audit quality on earnings management which is an under researched area. This study adopts a quantitative research approach that analyses secondary data extracted from the audited financial statements of a sample of 50 nonfinancial companies using a random sampling technique. The main source of data was the audited annual reports of the sample companies, issued during 2014/15 to 2018/19. Descriptive statistics, correlation analysis and multiple regressions are used to analyze the quantitative data of the study. The findings of this study are useful to the investors to be mindful about relying on financial statements in decision making. Moreover, examining the effectiveness of the corporate governance practices will be of interest to the owners of the business in executing corporate governance mechanisms. The findings provide useful insights to regulators, policy makers and professional accounting bodies to better regulate the quality of audit services performed.Item The Impact of Sustainable Accounting Practices on Shareholders’ Wealth: Evidence from an Emerging Economy of Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Edirisinghe, K.P.M.; Wijekoon, W.M.H.N.Sustainability accounting is considered as a sub category of accounting which discloses the economic, social and environmental performance to stakeholders. This study investigates the impact of sustainability accounting practices on shareholders’ wealth of public listed companies in Sri Lanka. Extant literature on sustainability reporting are based on developed countries and dearth of studies available from developing countries. The aims of this research are to identify the level of sustainable accounting practices in the public listed companies in Sri Lanka and to examine the impact of sustainability accounting practices on shareholder wealth. Economic performance disclosure, environmental performance disclosure and social performance disclosure are used as independent variables of the study. Dependent variable is return on equity as a measure of shareholders’ wealth. The sample consists of 54 companies that disclose sustainability accounting practices and listed on Colombo stock exchange during the period from 2015 to 2019. All the secondary data are collected from Colombo stock exchange and company websites. E-views application software will be used to analyse data on the formulated models. Results of this study provide guidance for the companies that willing to establish sustainability reporting practices and it would helpful to create shareholders’ wealth by adopting sustainable accounting practices and create value to the entities. Findings of the study are of interest to all stakeholders including managers, investors, employees, government, accounting standards setters, preparers and users of accounting information for promoting them to preserve sustainability in long term.Item The Impact of Intellectual Capital on Financial Performance of Service Companies in Colombo Stock Exchange in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Dissanayaka, D.M.C.S.; Wijekoon, W.M.H.N.In modern economics, Intellectual capital is described as an intangible asset that can be used as a source of sustainable competitive advantage. However, intellectual capital components have to interact with each other to create value. The paper aims to investigate the impact of intellectual capital on public listed service companies' financial performance in Colombo Stock Exchange. A sample of 40 companies was selected from 117 companies representing 5 Global Industry Classification Standard industry groups listed on CSE. In this respect, the study has been conducted using data drawn for 2015 to 2019 from Consumer Services, Health Care Equipment & Services, Banks, Diversified Financials, and Insurance companies. The Value Added Intellectual Capital Coefficient (VAIC) model developed by Pulic (2000) is used to determine the IC performance. Accordingly, human capital, structural capital and capital employed efficiency are used as intellectual capital constituents of this research. Return on Assets (ROA) is used to measure the financial performance of selected companies. Findings provide useful insights to companies' management, especially those industries, in understanding the impact of various components in intellectual capital in their growth. This study also has practical and useful value in the perspective of human resource development and its implications. Thus, this study would guide the consultants and human resource managers to determine how much and how more value could be established by managing an organization's human resource.Item Impact of Corporate Governance on Capital Structure Decisions of the Listed Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, 2020) Weerasinghe, W.P.U.D.; Wijekoon, W.M.H.N.The objective of the study is to investigate whether corporate governance attributes such as board size, outside directors, CEO duality, Board experience, and director remuneration impact on capital structure decisions of listed companies in Sri Lanka. Most of the prior studies examined the relationship between corporate governance and performance of listed companies. However, limited research has been done on corporate governance and capital structure decisions in developing countries particularly in Asian and Sri Lankan context. This gap in the literature provides the rationale for the study. The sample of the research includes 50 companies from material and Food, Beverage & Tobacco sector. Data were collected from annual reports of companies for five year period. The findings indicate that the size of the board, external directors and the experience of the board are positively related to the overall debt ratio and the long-term debt ratio, while the remuneration of directors is negatively related. The duality of CEO is negatively linked to the long-term debt ratio. CEO duality in all regressions is considered strongly negligible. Total debt ratio and the long-term debt ratio are negatively related to control variables such as profitability and liquidity, while firm size is positively related. The tangibility of assets is linked positively to the long-term debt ratio and negatively to the total debt ratio. While Sri Lankan firms, relative to firms in developed countries, have poor internal and external corporate governance structures, the empirical findings indicate that corporate governance characteristics partially explain the financing actions of Sri Lankan firms. The empirical findings of this study provide useful insights to corporate managers in building an appropriate capital structure and regulatory authorities in enacting legislation and improving institutional support to make the country's corporate governance structures function more efficiently. This study contributes to the literature by providing empirical evidences from a developing country, Sri Lanka.