ICARE 2021

Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/24724

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The Audit Committee Characteristics and Earnings Quality of Public Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Rathnayake, M.L.M.L .; Kawshalya, M.D.P.
This study examines the impact of Audit Committee Characteristics on Earnings Quality of Public Listed Companies in Sri Lanka. Several prior studies have examined this relationship in developed countries. There appears to be a dearth of literature on the subject in developing and Asian countries and Sri Lanka in particular. 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 Audit Committee Characteristics and Earnings Quality. Quantitative approach is adopted in the study to find answers for the research questions. Audit Committee Size, Audit Committee Independence, Number of Audit Committee Meetings, Financial Experience of Audit Committee Members and Percentage of Common Stocks Owned by Audit Committee are used as independent variables and Earnings Quality used as the dependent variable of the study. Regression analysis is used to analyze data. The dataset covers all companies in the Colombo Stock Exchange in Sri Lanka except banks, finance and insurance companies and collected data for 5 years period from 2016 to 2020. Findings of the study will be useful to identify the impact of disclosure quality on the financial performance of the listed companies in Sri Lanka. Findings also provide useful insights to regulators and policymakers in coming up with appropriate policies.
Auditor’s Opinion, Auditor’s Size, and Value Relevance of Accounting Information
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Saran, V.; Kawshalya, M.D.P.
The main Purpose of this research is to study the effect of auditor’s opinion and audit firm size on the value relevance of accounting information of the companies listed on the Colombo stock exchange during the years 2018-2021. The feature of financial information to significantly affect the investors’ decision-making process, reflected by the stock price or stock return, is called value relevance The research includes a sample of 107 companies’ observations for 4 years drawn from the listed companies, and the research hypotheses were analyzed using multivariate regression model based on panel data. Data are hand collected from the annual reports of the companies. Financial institutions, banking, finance, and investment firms are also eliminated since their accounting and reporting environments differ from those in other industries.
Board Characteristics & Integrated Reporting Quality – Evidence from Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dilhani, A.V.H.; Wijekoon, W.M.H.N.
Integrated reporting is the most recent innovation in the world of corporate reporting. It's a tool that can more accurately represent a company's ability to build value over time. In recent years, both professional and academic disciplines have become more aware of this reporting tool. However, despite previous studies that looked at many areas of integrated reporting, the quality of integrated reporting and the determinants that influence it are still little explored. This study, therefore, aims to bridge this gap by examining the impact of board characteristics on integrated reporting quality according to an agency theory approach. Therefore, the findings of this study offer a better understanding on the impact of board characteristics on integrated reporting quality of listed companies in Sri Lanka. Among the companies that publish integrated reports, the three companies with the highest market capitalization in all sectors of CSE are considered as sample. Accordingly, 60 companies were taken into consideration for the period from 2017 to 2020 with total number of 240 integrated reports. The data in this study were analyzed using descriptive analysis, Pearson correlation analysis, and linear multiple regression analysis. This study contributes to expanding literature in this field in various ways. First, it broadens the scope of agency theory's application. second, it reveals additional internal determinants of integrated reporting quality. Further, findings provide useful insights for practitioners, particularly for corporate executives and high-level corporate governance bodies. Moreover, findings are useful to policy makers and standard setters in revising and developing existing integrated reporting practices.
Board Composition and Its Effects on the Financial Performance of Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Gunathilake, K.S.; Aruppala, W.D.N.
Corporate governance mechanism gained considerable attention during past two decades as corporate scandals have taken place in the world. Some corporate failures in Sri Lanka made introduction to corporate governance mechanism and new Companies Act No. 7 of 2007 which replaced the old Companies Act No. 17 of 1982. The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) Securities and Exchange Commission (SEC) issued corporate governance regulations and corporate governance regulations made mandatory for all listed companies in Sri Lanka for the financial year commencing on or after 01st April 2008. This study focuses on four basic aspects of board composition that have been incorporated in recent reform of Codes of Best Practices: board size, CEO duality, gender diversity and independent directors in the board. The main objective of this study is to seek out the impact of board composition on the financial performance in listed companies. To get the efficient outcome, 50 companies were selected under ten GICS sectors in Colombo Stock Exchange (CSE) over 5 years from 2016 to 2021. Correlation and regression analysis utilized to find out the impacts of board structure on the financial performance. Moreover, this study is helpful for shareholders and policy makers to maximize the profit.
Board Financial Expertise and Dividend Paying Behavior of Sri Lankan Firms
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Karunarathna, W.D.N.K.; Abeywardhana, D.K.Y.
Dividend behavior is most debatable and inconclusive issue in the corporate finance. Various theories and studies have been developed based on the dividend behavior issues but still the dividend is an unresolved corporate finance problem. Therefore this study aims to use a new dimension called financial expertise on corporate board to explain the dividend policy behavior. Further, this research focus on investigating the relationship between board financial expertise and dividend paying behavior of firms in Sri Lanka. In this study, Lagged Dividend Yield, Proportion of Financial Experts on Board, Firm Size, Companies’ Profitability, Tax Efficiency, Retained Earnings and Leverage are considered as independent variables and Dividend Yield which is measuring the dividend paying behavior of firms is considered as the dependent variable. This study uses correlation and regression analysis to investigate and analyze secondary data of 60 non – financial listed firms which are registered in the Colombo Stock Exchange (CSE) and 420 firm year observations from 2014 to 2020. The findings of this study reveals that financial expertise on corporate board is positively related to dividend payments. Further, the results reveal that Sri Lankan firms use dividends as a control mechanism to mitigate the agency conflict to protect shareholders’ interests. Less attention has been given by the researchers on the board financial expertise as a dividend policy determinant in Sri Lankan context and findings of this study will useful for corporate decision makers, academic students, financial analysts as well as future researchers.
Board Involvement in Corporate Sustainability Reporting: Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Gunarathna, M.M.C.P.; Munasinghe, M.A.T.K.
Organizations can decide what should be disclosed and what should be left out of their sustainability report, and this decision is made by the board of directors. Prior studies have found different types of relationships between an organization's sustainability reporting and the characteristics of the board of directors. The goal of this study is to determine the association between board characteristics and sustainability reporting of Sri Lankan-listed firms over the five years from 2016. This research relies on secondary data which was collected from annual reports of listed companies in the Colombo Stock Exchange. The sample of the study consists of have been consecutively disclosed their sustainability information various business industries. The study adopts a quantitative approach. Multiple Regression model, Correlation model, and Descriptive Statistics are planned to use to test the hypothesis and find out the strength and direction of relationships. By examining the composition of the board of directors, shareholders may make informed judgments about their investments, and firms can efficiently manage internal changes. The findings will assist Sri Lankan corporations in determining board characteristics in order to strengthen sustainability disclosures.
Causal Relationship between Macro Economic Variables and on Firms Profitability. Evidence from: Banking Sector in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Biyagama, M.D.; Thilakasiri, K.K.
Banks play a vital role in Sri Lanka's financial system because they provide the entire economy with liquidity while changing the risk characteristics of assets. The performance of commercial banks can be affected by internal and external factors which can be classified into bank specific (internal) and macroeconomic variables. Number of Sri Lankan banks have faced financial crisis therefore many banks have been bankrupted in near past. This study focused on the effect of macroeconomic factors on the profitability of private commercial banks in Sri Lanka for12 years’ period from 2009 to 2020. Panel data regression analysis has been used to analyze the secondary data, that were collected from annual financial reports of selected companies and annual reports from central bank in order to answer the research questions. Inflation Rate (IR), Exchange Rate (ER), GDP growth (GDP) taken as independent variables. and return on assets (ROA) is considered as dependent variable. It was used Pearson’s correlation analysis and regression models to investigate the relationship among macroeconomic indicators and performance of commercial banks, data were analyzed using E- Views packages. The findings of the study will provide useful insights to the interest parties for purpose of decision making.
Challenges in the Adoption of Computerized Accounting Systems in Small and Medium Enterprises of Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Wanigasooriya, W.A.S.S; Gunasekara, U.L.T.P.
Use of Computerized Accounting Systems (CAS) are popular among business entities since they provide with numerous advantages such as speed, accuracy, legibility, efficiency, up-to-date information, cost savings etc. However, in the Small and Medium Scale Enterprises (SMSE) in developing countries such as Sri Lanka are still behind in adopting computerized accounting systems due to many reasons. Further, there are very few studies in this area specially studied the challenges in the adoption of CAS in SMSE sector. Therefore, this study aims to identify and understand the challenges in the adoption of CAS in SMSEs of Sri Lanka and to test the impact of cost to be borne in the adoption and maintenance, number of employees, size of the organization, and users’ perception on the adaptation process. Further this study uses the quantitative research approach using a questionnaire survey. Data is collected through 100 SMEs representing manufacturing, trading and services sectors in Western Province, Sri Lanka. This study contributes to the on-going literature on the CAS and the users to improve the systems to a better level.
Challenges of Implementing Computerized Accounting System in Small and Medium Scale Enterprises in Sri Lanka (With special reference to Western Province)
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Srimali, R.K.U.; Aruppala, W.D.N.
Small and medium businesses make up 80% of all businesses in Sri Lanka. The major goal of this research is to determine the barriers to the implementation of computerized accounting systems in Sri Lankan SME's. This study focuses on the impact of cost, the nature of the organization, organization infrastructure, convenience of use, management aid, and government assistance on the adoption of a computerized accounting system in Sri Lanka, as a current topic. Computerized accounting system was a crucial component in the smooth operation of the firm due to the epidemic in the country. The research question is to find out why many small and medium-sized businesses in Sri Lanka don't use computerized accounting systems and what are the reasons on it. There has been no research on the reasons why small and medium sized businesses in Sri Lanka do not use computerized accounting systems, as well as the impediments to their use. This study contributes by encouraging small and medium-sized businesses to adopt computerized accounting systems. Most SMEs can get their technology decisions on computerized accounting systems through this research findings. This study is based on quantitative approach which uses numerical method. 150 SMEs in the western province were surveyed using a standardized questionnaire. The question is primarily based on the literature review conducted in conjunction with this research. The dependent variables are addressed in the first section, while the independent variables are addressed in the second section, which is the use of computerized accounting systems in SMEs. The data will be collected and analyzed using the SPSS software and tool. Furthermore, the study's findings will aid owners, managers, and other stakeholders to identifying obstacles that SMEs have while deploying computerized accounting systems.
Characteristics of Female Directors and Earnings Management: Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Bandara, W.W.G.A.M.; Wijekoon, W.M.H.N.
This study investigates the impact of female directors on earnings quality in a developing country which has patriarchal emerging society and a considerable gender equality gap. An analysis of previous research reveals that dearth of literatures, and no prior research has been devoted to study the relationship between earning management and female director characteristics in Sri Lanka particularly. Therefore, this study aims to fill the gap in the literatures by examine the impact of specific characteristics of female directors on earning management. Multiple regression analysis was employed to identify the association between female director characteristics and earning management. As a proxy for earning management practices, the modified Johns model was used to estimate current discretionary accruals. The study used data collected from annual reports of all non-financial companies listed in Colombo Stock Exchange for the period from 2015 to 2020. The Sample comprises of 180 nonfinancial firms and 900 firm year observations. Findings of the study provide useful insights to Sri Lankan corporates to determine the best practices of board governance and to policy makers to strengthen corporate governance practices of Sri Lanka as it has a close link with the earnings management.
Consumer Attitude on Online Shopping Intention: With Special Reference to Gampaha District in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Samanmalie, M.D.M.; Madurapperuma, M.W.
Consumer attitudes appear to be more influenced by the digital environment as a result of technological advancements and E-commerce activities, which has resulted in the growth of online purchasing activities. In this fast increasing industry, online shopping has become a vital aspect of consumer life, literally putting the consumer in control. The purpose of this study was to ascertain the critical drivers of customer attitude toward internet purchasing in the Sri Lankan environment. The purpose of this study was to offer a conceptual model of consumer attitude toward online shopping intentions by identifying the important components identified in prior research and developing hypotheses appropriately. Numerous studies have been conducted to examine the relationship between consumer attitude and online buying intention, but in the Sri Lankan context, there is a dearth of study on this subject following the pandemic. This study employed primary data from an online survey and evaluated hypotheses using multiple regression analysis and the E-Views program on a sample of 300 Sri Lankan online respondents in the appropriate category during the era of social separation caused by the Covid-19 outbreak. These study findings can aid in the comprehensive understanding of consumer behavior, allowing the online shopping industry to identify the most effective methods for engaging their customers' interest, attracting them to visit websites, and increasing online sales, as well as recommendations for the government to effectively support the online shopping industry in the future.
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.
Corporate Governance and Capital Structure of Listed Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Dalugama, D.M.S.R.; Wijekoon, W.M.H.N.
Firms should attempt to determine the optimal capital structure that causes the maximization of firm’s value. The primary objective of this research is to empirically examine the effect of the corporate governance on capital structure decisions of listed companies in Sri Lanka. Prior research in this area focuses more on the listed companies in developed countries and thus, limited research is available from developing country context, Sri Lanka. Moreover, prior empirical studies have been presented mix findings and have failed to identify most significant corporate governing attributes affecting capital structure. This study fills these gaps in the literature. Therefore, study aims to consider the effect of corporate governance variables such as board size, board independence, CEO duality, board meetings and gender diversity of board on capital structure decisions in Sri Lanka. The sample included one hundred listed companies in Sri Lanka and data were collected for the period from 2016 to 2020. Multiple regression analysis and correlation statistical techniques were used to estimate the impact and the relationship between corporate governance attributes and capital structure. Findings of the research are useful for leading Sri Lankan corporates, managers, students, and researchers in making their capital structure decisions.
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.
Corporate Governance and Timeliness of Audited Financial Statements: Evidence from Listed Material Companies in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Withanachchi, R.S; Kawshalya, M.D.P.
The timeliness of companies audited financial statements is regarded as to a significant aspect influencing the usefulness of information available to external users for decision making process. The shorter the audit report delay in releasing audited financial statements, users of financial statements can obtain more useful information and benefits from these statements. The purpose of this study is to investigate influence of composite corporate governance (CG) on audit report delay. Corporate governance is investigated under three specific categories namely audit committee, board structure and operations, board diversity on audit report delay (ARD). Furthermore, this study identified factor that affect ARD other than corporate governance such as liquidity, profitability-return on equity, auditor type, number of subsidiaries and size of the company. The data for the study is collected from annual reports of all the listed companies of material sector in Colombo Stock Exchange (CSE), covering period of 2011/2012 to 2019/2020. Data were analyzed using regression analysis and E-Views packages. This study generates valuable insight in the area of corporate governance and timeliness of audited financial statements in Sri Lankan context.
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.
Detecting Financial Statement Frauds Using Beneish Mscore Model Evidence from Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Nimhan, K.A.R.; Abeywardhana, D.K.Y.
Financial statement manipulation refers to the practice of using creative accounting treatments to make a company’s financial statements reflect what the company wants its performance to look like rather than its actual performance. Financial statements are the outcomes of the accounting process that are used by investors, shareholders, management, and other third parties to make various decisions. As a result, one of the greatest challenges facing companies, institutions, and organizations in the twenty-first century is financial statement fraud, which is increasing in quantity and size, affecting people's trust in the credibility of financial statements and corporate reports. Therefore, this study aims to identify the indications of financial statement fraud in public listed companies in the Colombo Stock Exchange (CSE) and to study how the different sectors are affected by the financial statement frauds by applying the Benish M-Score model. The sample of this study consists of all the companies listed in CSE excluding bank, insurance, and diversified financials industry group between for the period of 2016-2020. Accordingly, this study uses secondary quantitative data by using annual reports of the listed companies. The Beneish M-score model has been applied to different listed companies worldwide in order to detect the existence of income manipulation. Therefore, this study concentrates more on these concepts in order to detecting financial statement frauds in Sri Lanka. This study is very useful to the users of financial statements in Sri Lanka.
Determinants of Capital Structure of Commercial Banks in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Senarathna, A.T.M.; Aruppala, W.D.N.
The financing mix of long-term debt and equity is known as capital structure in corporate finance and capital structure decisions are a key issue in a firm’s financial strategy. The optimal capital structure indicates the best debt-to equity ratio for a firm that maximizes its value while minimizing its cost of capital. This study aims to investigate the most important factors that affect the capital structure of commercial banks in Sri Lanka. Profitability (PROF), Earnings volatility (EVOL), Tangibility (TANG), Growth (GROW) and Bank size (BSZ) were used as independent variables while Book leverage (BLV) is used as the dependent variable. The study used secondary data of eighteen (18) commercial banks covering the period of 2011 to 2020. Data were analyzed using regression analysis and E-Views packages. The results expect that Profitability, Tangibility and Bank size will have negative impact on Book leverage while other variables have positive impact on Book leverage. This study will discuss the connection of trade- off theory and pecking- order theory with these relationships among variables as well. Findings of the study will be of interest mainly to managers which will help them to identify the bank- specific factors affecting the capital structure and choose the values enhancing optimal capital structure.
Determinants of Disclosure of Key Audit Matters in Listed Companies in Colombo Stock Exchange
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Rukshan, R.; Lakshan, A.M.I.
Key Audit Matters means, those matters that, in the auditor’s professional judgment, are of most significant in the audit of the financial statements of the specified period. The purpose of this study is to investigate the factors that auditors take into consideration when issuing Key Audit Matters. The research design is quantitative, with a population of non-financial companies listed in Colombo Stock Exchange in the period of 2018 – 2020, considering on the Number of Key Audit matters disclosure issued by independent auditors. This research includes the number of Key Audit Matters disclosure as dependent variable. The analysis is based on secondary data and multiple regression analysis is used to initiate the relationship between the dependent variable and independent variables. Independent variables include audit firm size, number of audit committee members, number of audit committee meetings, and the number of independent directors. Company’s characteristics includes company size, number of company’s subsidiaries, ratio of receivable and inventory to total assets, ratio of debt to equity, the earnings before interest and tax to total assets, and industry type are the control variables. This research will identify the relationship between Number of Key Audit Matters and determinants of Key Audit Matters.
The Determinants of Financial Institutions Profitability A Study on the Banking and Non-Banking Financial Institutions in Sri Lanka
(Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2021) Koswatta, K.M.S.M; Sujeewa, G.M.M.
Financial Institutions plays a major role in providing better financial services in any economy. Profitability of the financial institutions has become vital for financial stability. The purpose of this paper is to investigate the relationship between bank and finance companies-specific characteristics on profitability in Sri Lankan banking and non-Banking sector. The research is conducted using twenty-four licensed Commercial Banks and forty-one licensed finance companies in Sri Lanka as the sample out from the population. It is used the secondary data collected from published financial statement of listed in Colombo Stock Exchange (CSE) for the period of five years from 2015 to 2020. Banking and non-banking financial institutions size, Capital ratio, Loan ratio, Deposits, Loan loss provisions are considered as independent variables while Return on equity (ROE), Return on assets (ROA), Net interest margin are considered as profitability measure of this study as dependent variables. The collected data are analyzed though multiple regression analysis. The finding of study will provide information to present and potential investors for making optimal decisions on which internal factors to be considered in making investments on finance sector in Sri Lanka.