ICARE 2018
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/19607
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Item The Value Relevance of Accounting Information: A Comparison between Published Interim and Annual Financial Statements(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Weerasinghe, P.S.M.; Karunarathna, W.V.A.D.Main objective of the accounting information is providing useful information to stakeholders of the entity. Current and prospective investors are the most important users of such information. Public Listed Companies in the stock market use financial statement as one of the main medium of communication with their stakeholders. Value relevance can be defined as the ability of information disclosed by financial statement to capture and summarize firm value. Investors predict future performance through existing accounting information. When the economy changes time to time investors need to be referred timely information for the investment decision making. If the investors depend on outdated information, investment decision will become inappropriate and ineffective. On the other hand, investors can obtain the short-term financial progress from the interim quarterly financial statements and also they can use audited annual financial reports after completing the accounting year. Therefore, the purpose of this study is to distinguish the value relevance between interim financial statements and the audited annual financial statements in Sri Lanka context. The study is based on 35 listed manufacturing companies in the Colombo Stock Exchange (CSE) for the period of 2012 to 2017. The relevant data were gathered from the published interim financial report, audited annual financial statement and publish research articles. Earnings per share, book value per share, dividend per share and return on equity are use as key independent variables. Data were analyzed using correlation and regression analysis through E-views software. The results show that the interim financial statement appear to have higher value relevance than annual financial statement and value relevance of accounting 4th International Conference for Accounting Researchers and Educators 61 information has the significant impact on share price and value relevance of accounting information is significantly correlated with the share priceItem The Impact of Dividend Policy on Shareholders’ Wealth and Business Performance of Listed Manufacturing Companies in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dilshani, L.D.C.; Abeywardhana, D.K.Y.The Dividend policy play a major role in current business as most important financial policy not only from the viewpoint of the company, but also from that of the shareholders, the consumers, employees, regulatory bodies and the government. The study aims to identify how the dividend policy influences the shareholders ‘wealth and the business performance of listed manufacturing companies in Sri Lanka. Dividend per share (DPS) and Dividend yield (DY) use as Dividend policy indicators while Return on Equity (ROE) use as business performance indicator and earning per share (EPS) and Market share price (MSP) use as shareholders’ wealth indicator. The study use secondary data of 30 manufacturing companies covering the period of 2012 to 2017. Data analyze using regression analysis. The result reveals that dividend policy has significant positive impact on shareholders’ wealth and the business performance of listed manufacturing companies in Sri Lanka. The previous empirical studies provide evidences that dividend policy has significant positive impact on shareholders’ wealth and the business performanceItem The Impact of Intellectual Capital on Firm’s Market Value and Financial Performance(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Ganegoda, G.P.S.K.; Karunarathna, W.V.A.D.Intellectual capital has a huge impact on the firms’ value creation process and it will also generate competitive advantage to the organization with the development of knowledge based economy. The study aims to identify the impact of intellectual capital on firm’s market value and financial performance of the bank, finance and insurance sector and manufacturing sector in Sri Lanka. Return on asset and market to book value are separately used as dependent variables. The Value Added Intellectual Coefficient (VAIC) method introduced by Pulic (2000) is used to measure the intellectual capital of the firm. The study used secondary data of 15 bank, finance and insurance sector companies and 15 manufacturing sector companies covering the period of 2012 to 2017. Data were analyzed using linear regression model and used E-Views software to perform statistical tests. The results revealed that intellectual capital significantly impact to the firm’s financial performance in bank, finance and insurance sector. However, according to the results there was no significant impact of intellectual capital on firm’s financial performance in manufacturing sector. Furthermore, intellectual capital has no significant impact on firm’s market value in both sectorsItem The Impact of IFRS Adoption on Financial Statements and Value Relevance: Evidence from Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dissanayaka, H.M.K.G.L.B.; Karunathna, W.V.A.D.The aim of this study is to explore the effect of International Financial Reporting Standards (IFRS) adoption on commonly employed financial ratios and investigate the value relevance of IFRS adoption by comparing the association between accounting measures and market values under GAAP and under IFRS of listed manufacturing companies in Colombo Stock Exchange. This study employs 20 listed manufacturing companies with both pre-IFRS (2009- 2011) and post-IFRS (2013-2015) information. Data were analyzed by using panel data regression model and correlation analysis. And also T test and Wilcoxon signed rank test are used to explore the effect of IFRS adoption on financial ratios. Results of the study showed that IFRS adoption does not significantly change the central values that depict the financial position and performance of Sri Lankan companies in financial statements. Therefore value relevance of accounting information has not significantly improved in the post-IFRS period than the pre-IFRS period. However several financial statement measures and ratio are affected significantly in transition to IFRS. Further studies are encouraged to conduct on investigating the impact of IFRS adoption on financial statement and value relevance by expanding the sample size with incorporating more accounting quality measurement indicators, measurement and ratiosItem Factors Affecting to Formal Accounting System in SME’s in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Bandara, R.M.S.S.S.; Karunarathna, W.V.A.D.Small and Medium enterprise can’t be ignored throughout the economic and social world because of the Small and Medium (SME) sector provides more contribution to Gross Domestic Product (GDP) and significant percentage has taken by SME sector in the Sri Lankan economy and also it is very much important for solving unemployment problem of the country. It is important to study how affect formal Accounting systems effect on the survival and growth of SMEs. Therefore, this study aims to identify what are the factors affect to the formal Accounting System in SME’s in Sri Lanka. So, Financial Accounting Practices, Skills of Financial Accountant, Business Life Cycle, External Pressure and Capacity Argument are considered by the study as independent variables of the study that affect to the adoption formal accounting system for the SME’s. The study used Primary data of 60 Small and Medium Enterprises located in Kurunegala District. A well-structured questionnaire was used to collect data from the respondents of the study. Descriptive statistics and Correlation analysis were applied using SPSS software. The Results of the study revealed that there is a positive relationship between formal Accounting System and SME’s Financial Accounting Practices, Skills of Financial Accountants and External PressureItem The Impact of International Financial Reporting Standards Adoption on the Value Relevance of Accounting Information: Evidence from the Public Listed Manufacturing Companies in the Colombo Stock Exchange in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Athukorala, A.S.P.; Karunarathna, W.V.A.D.The purpose of this study is to investigate the impact of International Financial Reporting Standard (IFRS) adoption on the value relevance of accounting information in Sri Lanka and also the study has made a comparison between the value relevance of accounting information in pre- and post- adoption periods of IFRS. Sri Lanka has adopted Sri Lanka Financial Reporting Standards (SLFRS) which is almost aligned with the IFRS with effect from 1st January 2012 onwards. This study employs Ohlson (1995) price regression model to explain value relevance of accounting information. It explains market value per share (MPS) using earning per share (EPS) and book value of equity per share (BVEPS). The pre-IFRS period consist of 5 years from 2007 to 2011, and the post-IFRS period is 5years from 2012 to 2016. The sample comprises 28 firms and 280 firm-year observations. There are many studies available on IFRS adoption internationally. However, there is no clear evidence that IFRS adoption enhances the quality of accounting information pertaining to Sri Lankan context. Mainly the data were analyzed by using multiple regression model and correlation analysis. Results of the study showed that value relevance of accounting information has not significantly improved in the post- IFRS period than the pre-IFRS period. Further studies are encouraged to conduct by expanding the sample size and incorporating more accounting quality measurement indicators.Item The Impact of Internal Control Systems on Profitability: A Study Based on Employees’ Perception of Licensed Commercial Banks in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Jayaweera, W.T.N.; Karunarathna, W.V.A.D.Internal control system plays an important role in preventing and detecting fraud and also protecting the tangible and intangible assets of an organization. Therefore, it is important to study how the internal control system of an organization affects the organization’s performance. Indeed, it is critical for banks and financial institutions to recognize the risk they encountered. So the purpose of this study is to investigate the impact of internal control system on profitability of an organization and it is mainly based on employees’ perception on internal control system of Licensed Commercial Banks in Sri Lanka. Internal control system consists of control environment, risk assessment, control activities, communication and monitoring. The study selected a sample of permanent employees of 25 licensed commercial banks in Sri Lanka. The study used on primary data and it was collected using semi-structured questionnaires with open- ended and close-ended questions. Data was analyzed by using Statistical Packages for Social Science (SPSS). Descriptive statistical measures and the regression analysis were applied to analyze the data of the study. The results of the study showed that the internal controls have statistically significant impact on profitability. Furthermore, findings of the study revealed that the elements of internal control systems comprising control environment, control activities and monitoring have significant and positive impact on profitability in licensed commercial banks in Sri LankaItem The Utilization of Generalized Audit Software (GAS) by Sri Lankan External Auditors(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Senarathne, G.R.S.D.; Perera, H.A.P.L.Generalized audit software is a tool used by auditors to automate various audit tasks. As most accounting transactions are now computerized, auditing of accounting data is also expected to be computerized as well. The purpose of this study is to investigate the utilization of generalized audit software by external auditors in Sri Lanka and what are the factors influenced the use of generalized audit software. This study carried out using a standard questionnaire which consists of mainly five parts. The sample of the study was auditors of five international audit firms and five local audit firms. 100 questionnaires have been distributed to auditors and out of all, 70 responses were received from the selected sample, 40 from international audit firms and 30 from local audit firms. The collected data have analyzed using the Statistical Package for Social Science (SPSS) software. According to the findings of the research, the utilization of generalized audit software is low among local audit firms and all the international firms use generalized audit software. Organizational factors, technological factors, client factors and personal factors influence to the usage of generalized audit software and audit profession factor not influence to utilization of audit software. This will provide useful insights for audit professionals, software developers, vendors, academicians and researchersItem Stock Market Development and Economic Growth in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Perera, K.A.H.; Madurapperuma, M.W.Stock market plays an important role on economic development and it promotes the economic growth and prospects of the economy. The main objective of this research was to identify the impact of Stock Market Development on the Economic Growth in Sri Lanka. Using data for the period from 2000 to 2017, this study employed ECM for long run relationship and for the short run dynamics. Market capitalization, Stock total traded value and turnover ratio and inflation were taken as independent variables; stock market development was taken as the dependent variable. The annual time series data were employed for the Sri Lanka economy for the period of 2000 – 2017. These data were collected from website of Colombo stock Exchange annual reports of Central Bank of Sri Lanka, Department of Census and Statistics of Sri Lanka web site. Multiple regression model and correlation analysis were used to analyze the data using E-views software. The findings of this study suggest a positive relationship between efficient stock market and economic growth both in short run and long run. The results are consistent with the theoretical predictionsItem The impact of Tax Policy Changes and Gross Domestic Production on the Tax Revenue in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Begam, M.I.S.; Rajapakse, R.M.D.A.P.Taxation is a mode of revenue mobilization, providing resources for National Budgets and forming an important part of the macroeconomic management. The tax revenue is one of the major sources of income in every government. Tax policy and Gross Domestic Production influence to the government revenue of a country. Sri Lanka has been continuously producing budget deficits even though the tax revenue as a whole has been rising throughout the years. This study aims to identify the impact the tax policy changes and GDP of Sri Lanka has had on the tax revenue collected in Sri Lanka covering 17 years throughout the period from 2000 to 2016. Data was analysed using trend analysis and with the aid of IBM SPSS, OLS regression and correlation was used to understand the impact. The overall model predicts 89% of variance in the tax revenue. The results revealed that the correlation analysis confirms that there is no significant relationship between tax policy changes and tax revenue and the Gross Domestic Production of the country has a positive and significant impact on the Tax Revenue