ICARE 2021

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Impact of Integrated Reporting adoption on Firm Value of Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nivanthi, R.; Lakshan, A.M.I.
Traditional accounting practices became less effective with the time being tosatisfy stakeholders’ expectations. Integrated Reporting (IR) is the latest reporting innovation to eliminate the shortcomings of the traditional reporting principles. By considering those trend, this study focuses to investigate how the concept of IR affects to the value of companies those registered in Colombo Stock Exchange (CSE). This research identifies the impact & relationship between the level of IR adoption and firm value of the CSE listed companies. For this study, all IR adopted Sri Lankan listed companies were taken as population and randomly selected 50 companies were taken as sample. Data was collected from 2015 to 2020 using annual reports of selected companies. Level of integrated reporting adoption was the independent variable while profitability, market value and leverage were taken as dependent variables to substitute to the firm value. Descriptive statistics, regression analysis and correlation analysis were used to find the results. Findings of the study shows a positive relationship between IR adoption and firm value. Results of the study brings an idea to the interested parties of business, how Sri Lankan organizations’ value creation process affected as they implemented and producing Integrated Annual Reports. This research is a good motivation to companies which have not adopted integrate reporting as reporting principle. The study is beneficial to interested parties of businesses such as investors. The findings of the study contribute to the literature of IR adoption and its impact on the firm value.
The Impact of Corporate Governance on Firm Performance: Evidence from Listed Finance Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Menikbowa, M.S.P.K.N.; Wijekoon, W.M.H.N.
Corporate governance has become a popular discussion topic in developed countries as well as developing countries due to numerous corporate failures, scandals and frauds occurred around the world. In the existing literature, it was found that authors have studied the impact of corporate governance characteristic on firm financial performance. However, studies of the above relationship in particularly unstable and there is paucity of research of Sri Lanka specially related to listed finance companies. Further, studies which examine the gender impact on firm performance is limited. Board size, Board meetings, Proportion of non-executive directors, CEO duality, Females’ directors in board and Education level in board were used as proxies for the corporate governance variables and return on equity and return on assets were used as dependent variables which denote the firm performance. The sample of the study comprises of 31 listed finance companies in Sri Lanka which assets-based value is greater than Rs. 10 billion. All the data were obtained from published annual reports over the period of five years from 2015 to 2020 and data were analyzed by using descriptive statistics and regression analysis. This study provides useful findings to stakeholders in providing suggestions to improve corporate governance practices of the Finance companies which may help to enhance the performance. Further, investors have the opportunity to draw conclusions when making their investment decisions.
Impact of Board Characteristics on Agency Cost and Financial Performance of Non-financial Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sandeepanee, K.S.; Sujeewa, G. M. M.
Sound corporate governance practices are important in order to reduce the risk of investors, attracting investments, lowering agency cost and improving the financial performance of companies. However, the way in which corporate governance is organized vary from country to country, depending on their economic, political and social context. This study examines the impact of board characteristics on agency costs and financial performance of nonfinancial companies listed in Sri Lanka for the period of 2016 to 2021. For this purpose, three board characteristics are chosen as independent variables, Board Size, Proportion of non-executive directors, CEO duality. An inverse proxy of agency costs is used; asset utilization ratio, which reflects the managerial efficiency and interaction of free cash flows with growth. As the dependent variables, the firm performance is measured by accounting base measurements; Return on Assets (ROA) and Return on Equity (ROE) and market base measurement, Tobin Q. The collected data are analyzed through descriptive statistics, correlation analysis and multiple linear regression. The findings of this study will provide useful insights to the interested parties on significant variables of corporate governance mechanisms which enables to reduce agency conflicts, the agency costs and to enhance firm’s financial performance.
The Impact of Financial Reporting Quality on Audit Opinion: Evidence from Listed Companies of Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Fernando, W.W.U.L.; Aruppala, W.D.N.
Type of audit opinion is important for all stakeholders; A lot of stakeholders’ decisions depend on the financial figures presented and disclosed by the management of the relevant firm. Stakeholders, mainly shareholders can’t or because of limitations, they can’t individually join with firms’ operations, that’s why they depend on independent third-party opinion about the financial statement prepared by the management. Firm-specific characteristics have a direct impact on the type of audit opinion. The purpose of this study is to examine the association between financial reporting quality and audit opinions. This study uses a multivariate regression analysis to tests it hypotheses to a sample of firms listed in Colombo Stock Exchange during 2017–2020. Measure the financial reporting quality through Hutton et al. (2009) model and use type of audit opinion, and auditor’s remarks (explanatory notes) as the measure for audit opinions. This study provides empirical support for the theoretical views on the association between financial reporting quality and audit opinion. The results could be of interest of both auditors and managers, especially in emerging capital markets, who seek to improve financial reporting quality.
Relationship Between Working from Home and Employee Job Satisfaction: Special Reference to State Banks of Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Liyanage, K.K.; Gunasekara, U.L.T.P.
The concept of working From Home (WFH) is given more attention during the pandemic situation in the world. Most business organizations followed social distancing in workplaces as a control of spreading COVID 19 virus. Therefore, WFH concept is identified as a viable strategy in this situation and, most of the employers have switched into this strategy to ensure the survival of their organizations. At present, since the change of mode of work affected the minds of employees, and it is hypothesized that WFH affects employee job satisfaction in relation to their Physical, Social, Financial, Technical aspects. Data is collected from randomly selected 100 employees who have been engaged in WFH in two state banks by using a structured questionnaire. The hypothesis was statistically tested by using Regression and Correlation to measure the nature and extent of impact of WFH to job satisfaction. The result showed that WFH and job satisfaction has a positive relationship relevant to the Sri Lankan banking employees serving for states banks. This result provides implications for installing WFH practices in workplaces and employers may develop strategies to boost employee satisfaction visa WFH practices.
The Consumer Perception towards Internet Banking Adoption in Sri Lanka (With Special Reference to State Bank Consumers in Gampaha District)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Fernando, D.T.M.; Madurapperuma, M.W.
Internet Banking offers banks a new frontier of opportunities and challenges in the contemporary global banking market. The demand for internet banking in Sri Lanka is relatively low despite the recent improvements of information and communication technology. This study attempts to investigate an insight into the determinants of the state bank customers’ perception towards the adoption of Internet banking services with paying special attention to the role of perceived ease of use, perceived usefulness, perceived security and risk, relative advantage and compatibility. This study will extend existing body of Internet banking literature by providing rich insight on state bank consumer perception behaviour in Sri Lankan context. A research model grounded on the technology acceptance model (TAM) and Theory of planned behaviour (TPB) model. Data were collected from primary sources and online questionnaire survey is used to gather data from selected random sample of 300 state banking customers who were internet users from Gampaha district. Data analysis procedure will be conducted through the SPSS and E-Views software and Spearman’s rank correlation test will use to measure the relationship since gathered data were in form of Likert type scale and it assess the hypotheses. The findings of this study will expect to make several contributions to the academic literature and the banking industry about the consumer decision process on Internet banking and the results will be important to the banks to strategically plan their products and service offerings.
Intellectual Capital and Financial Performance: Evidence from the Banking and Diversified Financial Companies in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Maduwanthi, W.M.; Karunarathne, W.V.A.D
Global economies have transferred from an information-based economy to a knowledge-based economy. In that, Intellectual Capital (IC) is considered a vital corporate asset. Numerous investigations have highlighted that organizations can achieve competitive advantages through IC. This study aims to compare the results of the effect of IC on the Financial Performance of firms belonging to Banks and the Diversified Finance sector companies listed on the CSE. In addition, this study examines the moderating effect of industry on the relationship between IC and Financial Performance. Most of the prior studies have focused on multiple ranges of sectors. Still, direct attention has not been given to do a comparative study among the sub-sectors of the financial industry. Therefore, this study focused on comparing the Banking and Diversified Financial sectors to fulfill that gap. The Value-Added Intellectual Capital model (VAIC) is used to measure the IC components: Human Capital Efficiency, Structural Capital Efficiency, and Capital Employed Efficiency, while Return on Asset is used as the Financial Performance indicator. The sample of the study comprises 12 banking and 34 Diversified Finance companies' annual reports from 2015 to 2020. Panel regression analysis is used to examine the impact of IC on ROA by using E- views software. Empirical results indicate that HCE has a significant association with the Financial Performance of the financial companies in Sri Lanka. The finding of this study highlights the importance of knowledge-based resources in shaping the value of businesses in the emerging Banking and Diversified Finance sector companies in Sri Lanka.
The Impact of Capital Structure on Financial Performance: With Special Reference to The Beverage Food and Tobacco Industry
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dhanasekara, M.S.R.; Thilakasiri, K.K.
Capital structure decisions are very important for all the business companies as it directly affected to companies’ financial performance. Capital structure is the mix of the debt and the equity capital that can be used to finance firms’ assets. The focus of this study to examine significant impact of capital structure on financial performance for the beverage food and tobacco industry listed in Colombo stock exchange. Further it examined the relationship between capital structure and profitability and liquidity. This research used firm size as a control variable to identify the relationship between firm size and capital structure in the beverage food and tobacco industry. Population of this study is all 50-beverage food and tobacco companies listed in Colombo stock exchange. The sample of this research is consisting with 20 beverage food and tobacco companies which are listed in CSE Sri Lanka. Random sampling method is used for identifying the research sample of this study. This study covers from 2015 to 2019 time period. All the data for this research is taken from secondary data sources. This study uses quantitative methods to analyze the annual reports using various models and ratios to provide quantitative data to the study. After collecting the data, analysis will be doing by descriptive statistics, multiple regression, correlation analysis, and testing the assumptions. E-views will be used as a software in analyzing data.
Factors affecting for Consumer Purchasing Decision in Soft Drink Market (with special reference to youth segment in Monaragala District)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Kularathna, J.A.A.P.; Madurapperuma, M.W.
In today's competitive business environment, the majority of soft drink marketers have failed to achieve their marketing objectives and are unable to achieve their business goals as predicted, leading in a shift in customer purchasing behavior. The purpose of this study was to identify the most significant factors influencing customer purchasing decisions in the soft drink market and to analyze their relationship using correlation and regression analysis with SPSS. Consumer purchase decisions are considered to be the dependent variable, whereas reference groups and consumer attitudes are considered to be the independent variables. Independent variables were found to have a favorable link with purchasing decisions. Additionally, correlation research revealed that attitudes are key predictors of purchasing decisions. Additionally, the results suggested that the reference group considered in the study had no substantial influence on purchasing decisions. As a result, these insights can be used by the soft drink industry to develop and build new goods that are more focused on their target clients.
Corporate Governance and Working Capital Management Efficiency: A Comparative study Between Capital Good Sector and Food, Beverage & Tobacco Sector
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dhanushika, K.K.M; Ariyarathna, J.M.D.
The issue of corporate governance has risen in prominence while the confidence of the private sector has grown world-wide. The Asian Economic Crisis (1997) further pointed out why the issues of transparency and accountability in corporate governance are important to the reliance of investors and for national economic performance. The aim of this study is to identify the impact of corporate governance on working capital management efficiency in selected capital good sector and the Food, Beverage & Tobacco sector in Sri Lanka. Prior studies have given less attention to the Food, Beverage & Tobacco sector companies and comparative studies haven’t been done between two sectors. Therefore, this study focuses on doing a comparative study between the Capital Good sector and the Food, Beverage & Tobacco sector in Sri Lanka to fulfill this gap. Data are gathered from the published audited annual reports of 20 companies listed under the Capital Good sector and the 20 companies listed under the Food, Beverage & Tobacco sector for the period from 2015 to 2020. Multiple regression analysis is used to find out the significant influence of corporate governance on working capital management in each sector, and an independent sample t test is used to compare the working capital management efficiency between these two sectors. The results of this study will provide useful insight to investors, stakeholders and regulators to develop guidelines and get better decisions.
Impact of Accounting Practices on Performance of the Small & Medium Enterprises: Evidence from Colombo District
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Preethimali, E.B.M.P.; Munasinghe, M.A.T.K.
Small and Medium Enterprises are an important segment in many countries including Sri Lanka, due to its contribution towards the economic growth. Accounting can play a major role in SMEs successes as it does for corporates. However, little is known in this regard. Accordingly, the key purpose of this study is to identify the impact of accounting practices on the financial performance of small and medium-sized enterprises. A sample of 40 SMEs were selected from the Colombo District depending on the accessibility and time constraints. Data collected through questionnaires were analyzed using descriptive statistics. As findings reveals that financial reporting practices affect to the financial performance of SMEs in Sri Lanka. This study findings will be useful for Small and Medium Enterprises in Sri Lanka to improve the performance of the firm.
Stakeholders’ Perception on Auditors’ Role and Its Impact on Audit Expectation Gap, with Special Consideration to Licensed Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Prawanth, S.; Perera, K.H.
External auditor is an individual third party who express an independent opinion on the financial statements in accordance with the Sri Lanka Financial Reporting Standards (SLFRS), Sri Lanka Accounting Standards (LKAS) and Sri Lanka Auditing Standards (SLAuS). An agency relationship exists between the management of the entity and the owners of the organizations, as the management and ownership are two different parties. Therefore, the auditors are responsible for expressing an independent opinion on the quality of financial statements prepared by the Management of the entity. However, most of the stakeholders have misunderstood the responsibilities of management and the auditors and stakeholders (i.e., owners, customers, employees) expect much more from auditors in addition to expression of an opinion on the financial statements, such as investigate and prevent frauds, maintain proper internal control systems, prepare financial statements, etc. This results in an audit expectation gap. Therefore, this study was conducted to understand the stakeholder’s perception on auditor’s role and its impact on audit expectation gap. A sample of 600 shareholders, employees and customers from different licensed commercial banks were selected for the study using convenience sampling method. Information collected through questionnaires were analyzed using a statistical software package, SPSS and used descriptive analysis and sample T test for analysis of data. The study revealed that a gap exists between auditors and the stakeholders in aspects of audit responsibility, reliability and usefulness of audited financial statements. The reason behind this gap is lack of proper education and understanding regarding audit standards and audit practices. This gap can be reduced by giving adequate knowledge and awareness of audit to the stakeholders and the users of financial statements in general.
The Impact of Intellectual Capital and Financial Performance in Sri Lankan Banks
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sandaruwan, D.G.S.; Perera, K.H.
The main purpose of this paper is to examine the impact of Intellectual Capital (IC) on financial performance of Sri Lankan banks. The Value-Added Intellectual Capital coefficient (VAIC) approach developed by Pulic (2000) was used to determine the IC performance. Accordingly human capital, structural capital and capital employed efficiency were used as intellectual capital constituents of this research. Return on Equity (RoE) was used to measure the financial performance of selected banks. The data were obtained from the annual reports of 24 commercial banks listed in Colombo Stock Exchange (CSE) for the period from the year 2017 to 2021 to measure the impact of intellectual capital constituents on financial performance. Findings of this research indicated that Sri Lankan banks in general, have relatively lower human capital and structural capital efficiency compared to capital employed efficiency. Therefore, the results showed a greater impact of capital employed efficiency on financial performance compared to other intellectual capital constituents. Findings of this study will help decision makers and banking institutes to be aware of the importance of intellectual capital as a key factor that can improve a firm’s ability to maintain their competitive position.
The Impact of Electronic Banking on Financial Performance of the Listed Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Rathnayaka, R.M.N.K; Karunaratne, W.V.A.D.
With the current epidemic situation, communication and technology are making a significant contribution to the sustainable development of economies worldwide. The banking and financial industries are now at the tipping stage with the expansion of the Electronic Banking concept. The primary purpose of this study was to determine the impact of electronic banking on the financial performance of the listed commercial banks in Sri Lanka. Thus the study examined the impact of internet banking facilities, automated teller machines (ATM), and the size of the banks on the financial performance. The study planned to cover ten years period from 2011 to 2020 around twenty-four listed commercial banks in Sri Lanka. Based on the availability of Electronic Banking facilities, twelve banks were selected as the sample. The required data was gathered from the published annual reports of each bank, and multiple regression analysis methods were used to analyze the data through the E- views software. The financial performance was measured through the return on assets of the banks and the number of branches. To measure internet banking, net fee & commission income and number of ATMs were used as the indicators, and the size of the banks was used as a control variable. It was measured through total assets and the number of branches. The results showed that there was a significant positive impact of net fee and commission income, ATM distribution, and the number of bank branches on the financial performance except for total assets. Further, the study concluded that compared to the pracademic situation, in the post-pandemic period growth performance of Electronic Banking showed a significant improvement.
Impact of Related Party Transaction Disclosure on Firm Valuation: Evidence from Licensed Finance Companies Listed in Colombo Stock Exchange Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Muthukuda, M.W.A.P.; Perera, K.H.
This study was conducted to identify the impact of related party transaction disclosure on firm valuation for Licensed Finance Companies (LFCs) listed in Colombo Stock Exchange (CSE) Sri Lanka. Related party disclosures significantly affect the decisions made by potential investors and other stakeholders of the listed LFCs as a company can manipulate the company's financial performance by non-disclosure of significant related party transactions. Listed entities must comply with the rules and regulations in Sri Lanka and they are monitored by the Central Bank of Sri Lanka (CBSL). As a result, LFCs disclose related party transactions in the financial statements to comply with LKAS 24 Related Party Transaction Disclosure (RPTD). The study used a sample of 22 of LFCs listed in CSE Sri Lanka and used the Purposive / Judgment sampling method to select the sample from the population. The secondary data were obtained from audited financial statements and annual reports for a period of 5 years from 2015 to 2020. In addition, Related Party Transaction Disclosure (independent variable) was measured using the evaluation scheme of KPMG (KPMG, 2019) based on IAS 24 with slight modifications to improve comparisons across companies, avoid conflict. The dependent variable firm value was measured using Tobin's Q ratio (Nekhili & Cherif, 2011). The panel data were analyzed using E-Views. The study found that there is a negative relationship between Related Party Transaction Disclosure and firm valuation in the LFCs listed in CSE Sri Lanka. It is expected that the outcome of this study will lead to a better decision-making process for the potential inventors and stakeholders.
The Impact of Capital Structure on Financial Performance of Service Sector in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Maduwanthi, P.D.T.W.; Sujeewa, G.M.M.
Capital structure is one of the important factors in deciding financial performance of a business. This study is carried out to investigate the impact of capital structure on financial performance with special reference to the service sector in Colombo stock exchange. For the purpose of this study, independent variable is capital structure that measures by using debt to equity ratio and debt to asset ratio. Dependent variable is financial performance which measures by using return on equity (ROE), return on asset (ROA) and earning per share (EPS). In addition to that total asset and asset growth rate are used as control variables. This study uses secondary data from Colombo stock exchange and have selected 50 service companies for 5 years from 2016 to 2020. The collected data are analyzed through descriptive statics, correlation analysis and regression analysis. The findings of the study will provide insights to the management in deciding the optimal capital structure to contribute the higher level of profitability.
Firms’ Internal Audit Function and Quality of Its Financial Reporting in Sri Lankan Listed Companies
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Sangeeth, H.A.N.; Sujeewa, G.M.M.
The purpose of this paper is to investigate the relationship between firms’ internal audit function and the quality of its financial reporting. The paper uses questionnaires sent to internal audit departments in listed companies in Sri Lanka. Financial reporting quality recognized as the dependent variable and internal audit function identified as the independent variable. Independent variable measures using twelve variables; time and resources devoted to (1) financial auditing, (2) operational auditing, (3) compliance auditing, (4) management auditing, (5) Specialization of internal auditor in financial audits, (6) Internal auditor training and knowledge of accounting regulations, (7) Review of the management and financial information systems, (8) Review of the accuracy and reliability of the accounting records and financial reports, (9) external audit requests information, studies from the internal auditor, (10) periodic meetings between internal and external auditors, (11) external auditor provides important information for the internal auditor to develop its work, (12) internal auditors collaborate with external auditors in annual audit. The collected data analyses using two analysis techniques; (1) regression analysis, (2) Univariate and multivariate analysis. The findings of the study are important to regulators, management, boards of directors, and investors should all be aware of the findings. These findings help to enhance the transparency, integrity, and quality of financial reporting. Previous empirical researchers have examined at the quality of financial reporting with different variables in the corporate governance such as board of directors, audit committee, and external audit, and hard to find studies on relationship between firms’ internal audit function and the quality of its financial reporting.
The Impact of IFRS Adoption on Value Relevance of Accounting Information: Empirical evidence from Listed Commercial Banks in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Hallala, D.S.L.; Wijekoon, W.M.H.N.
The study examines the impact of IFRS adoption on value relevance of accounting information by comparing the association between accounting measures and market values of listed commercial banks in Colombo Stock Exchange. This study employs data from ten commercial banks for both pre- IFRS (2007-2011) and post-IFRS (2012-2016) periods. Data were analyzed using panel data regression method and Pearson correlation analysis. An analysis of literature reveals limited research that examines the value relevance of accounting information and effect of financial statements in the context of developing countries and Sri Lanka in particular. This study contributes to the existing literature by focusing on the dimension of value relevance of accounting information and act as references and encourage the interest among academicians and researcher to further research on impact of IFRS adoption in Sri Lanka. Findings of the study are useful to other developing countries those who have not yet adopted the accounting standard IFRS and to local and global accounting standard setters in determining the value relevance of the accounting information prepared under IFRS.
Corporate Governance and Financial Distress: Evidence from Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Kumarasinghe, P.K.N.M.; Wijekoon, W.M.H.N.
The purpose of this research is to examine the influence of corporate governance on financial distress of listed companies in Sri Lanka. An analysis of literature reveals that dearth of studies available in the context of developing countries that examine the impact of corporate governance on financial distress. The study used CEO duality, board size, board activity, board independence and gender diversity as independent variables for corporate governance and financial distress as the dependent variable. This study utilized publicly available data from annual reports of a sample of 58 financially distressed companies and a sample of matched 58 non distressed companies of Colombo Stock Exchange for a period covering from 2013 to 2021. The sample of companies comprises of all the sectors except banking, insurance and diversified financing companies. The descriptive statistics were used to estimate the comparative investigate of distressed and non-distressed companies. A binary logistic regression analysis was used to identify the impact of corporate governance on the financial distress of listed companies. The paper offers an in depth understanding on how corporate governance characteristics associated with the financial distress situation from the emerging stock market. It would be educational to potential investors, accounting professionals, corporate managements, financial analysts and be helpful for regulatory authorities in making policies for corporate governance reformation.
Perceived Determinants of Adoption of Cloud Based Accounting in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Piyarathna, T.M.N.S.D.; Gunasekara, U.L.T.P.
Accounting has evolved consistently over the past decades, with new addition and innovation by making it even better and challenging while providing satisfaction to the users. The recent shift in accounting with improved technology has immensely increased its capacity for end users. Cloud Based Accounting (CBA) is the recent trend in accounting, and it is expected to make accounting easily accessible, less expensive and time saving. In Sri Lankan context, a few empirical studies have been conducted to identify the perceived determinants of adoption of CBA. Hence, this study attempts to fill this knowledge gap. The objective of this study is to identify the level of human, technological, organizational, and environmental factors, and the relationship of those factors with CBA adoption. The impact of these factors on CBA adoption in Sri Lanka is identified with the view of providing workable suggestions to issues at different level of CBA adoption. To achieve these objectives data was collected from 100 accountants using a structured questionnaire. The data were analyzed by using descriptive, correlation analyses and multiple regression analysis. The findings provide constructive explanations of perceived determinants of CBA adaptation to the system implements. Therefore, it leads to successful implementation and utilization of CBA systems in Sri Lanka.