Volume: 2 Issue: 1 - 2022
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29869
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Item Does Ethical Banking Hold the Potential to be the Future of Banking?(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Jayasekera, M. A. K. D. S.; Pushpakumari, M. D.Banks are expected to play a major role in socio -economic and environmental progress of a country; yet, they have by and large neglected their societal and environmental responsibilities, thereby contributing mainly towards economic gains. As such, banks were blamed by civil society for not doing enough for the environment etc. They were also found wanting in providing services to lesser-privileged sections of society, thus unfairly excluding the category from the benefits of basic financial services. The economic downturn exacerbated their plight and exposed the banking sector’s irresponsible attitude. Naturally, there has been a public outcry for banks to act more responsibly in the future. The mood of the public seemed to reflect the yearning for an alternate banking model, in order to discharge social, environmental and economic responsibilities effectively. As a result, an Ethical Banking came to be accepted as an alternative, as this model encompasses all three elements -economy, environment and society. Ethical Banking strives to achieve the triple bottom line - planet, people and profit. These banks envisage financial inclusion and also deliver eco- friendly banking solutions to customers. The main objective of this study is to determine whether ethical banking has the potential to be the future of banking. The significance of the study is also to find out how ethical banking may be adapted as the most suitable banking concept of the future. This study is a desk research, in the form of a literature review. The review identifies that Ethical Banking holds the potential to be the future of banking. The outcome of this research, highlights the importance of banking to be ethically oriented, in order to maintain sustainability for the future.Item Differential Patterns of Textual Characteristics in the Chairman’s Statement and Company Performance: Evidence from Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Rosa, S. J. S.; Kawshalya, M. D. P.Corporate annual reports are continuously getting important in external reporting. The chairman’s statement is one of leading section of annual report that provides information beyond what is required by the regulatory frameworks. It is well-known fact that, those who prepare financial statements have motivation to exercise the content of Chairman’s Statements. In Sri Lanka, since Chairman’s Statement being a prominent requirement of annual report, this research investigates the textual differences of chairman’s statement in companies with higher performance and poor performance in terms of market capitalization. The research question is investigated by examining a range of textual characteristics in the chairman’s statements of 25 companies with highest market capitalization and 25 companies with lowest market capitalization listed in the Colombo Stock Exchange (CSE). The results of the current study indicate that content of chairman’s statement significantly affected by firm’s underlying performance. Since, Chairman’s statement is one of the most widely read section of the annual reports, the findings of this study will provide guidelines and enhance the understandability of the stakeholders who make informed judgments and decisions regarding organizations by reading the chairman’s statement.Item The Impact of Assets Liability Management on the Financial Performance: Evidence from Licensed Commercial Banks in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Madhushani, W. I.; Perera, K. H.The banking sector in Sri Lanka is one of the most dynamic and vibrant sectors of the economy. The banks are influenced by various types of risks and discrepancies which have a direct impact on the profitability of their short-term & long-term operations and sustainable capacity of earnings. The effective Assets Liability Management process will closely monitor and equalize both assets and liabilities and focus on the stability of adverse influences of both risks and discrepancies. The study aims to examine the significant impact of ALM on the financial performance of the licensed commercial banks in Sri Lanka from the financial year 2011 to 2020. Capital Adequacy Ratio (CAR), Non-Performing Loan Ratio (NPLR), Income Diversification Ratio (IDR), Liquidity Ratio (LR) and Operational Efficiency Ratio (OER) were used as asset liability indicators while Return on Assets (ROA) and Return on Equity (ROE) used as financial performance indicators. This study used secondary sources to collect data, such as published annual reports of licensed commercial banks and a central bank web site and selected all 24 licensed commercial banks in the population as the sample. The study used descriptive statistics, correlation analysis, and regression analysis to establish the relationship and effect of the ALM on the financial performance of the commercial banks in Sri Lanka. The findings indicate a significant negative relationship between NPLR and both ROE and ROA. The income diversification had a significant positive relationship with the ROA and also the ROE. Operational efficiency had a significant negative relationship with both ROE and ROA. The level of liquidity had a significant negative relationship with both ROA and ROE. The level of capital adequacy had a significant negative relationship with ROE. There is no significant relationship between CAR and the ROA. Based on the findings, which have the greatest implications for the policymakers who govern the financial performance of the banking sector, regulators who make regulatory requirements related to the banking sector, potential investors who invest in the banking sector and all other stakeholders & future researchers who are interested in the banking sector.Item Strategic Management Accounting Practices and Organizational Performance of Manufacturing Firms in Kurunegala District(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Nanediri, H. M.; Rajeshwaran, N.; Epitawalage, K. U.Different types of business strategies and a number of sophisticated strategy-based techniques have emerged to support to meet the challenges of global competition and customer satisfaction. The primary objective of this study is to examine the impact of strategic management accounting practices on organizational performance of manufacturing firms in Kurunegala District. The researcher has included dimensions of the strategic management accounting practices as strategic costing, strategic decision-making, competitor accounting, strategic performance, and customer accounting. A questionnaire was designed using five-point likert scales and distributed using a stratified random sampling technique among 164 Accountants/ Managers of manufacturing firms in Kurunegala District. Data were analyzed using descriptive statistics, correlation analysis, and regression analysis. Based on the findings of the study, it is concluded that there is a positive significant impact of strategic management accounting practices on organizational performance of manufacturing firms in Kurunegala District. As per the result of the study, it is recommended that managers employ strategic management accounting practices to enable them to identify, accumulate, and manage the costs of their activities to ensure accuracy in their decision-making.The findings in this study are supported by other studies in the literature and enable them to implement suitable strategies.Item Impact of Cultural Dimensions on Accounting Practices in Sri Lanka: Study of Accounting Professionals’ Perspective(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Nanayakkara, D. R. N. A. M.; De Silva, P. O.The accounting harmonization process entails increasing the compatibility of accounting practices while minimizing variance. This process of ordering various accounting practices is vulnerable to a variety of powers, including political, cultural, and legal. Sri Lanka, as a multifaceted and multicultural country, is particularly affected by this issue. However, there is a paucity of research on the cultural trajectories that influence accounting practices in the Sri Lankan context. As a result, the research looks into the impact of the cultural variables on accounting practices in Sri Lanka. The study takes a quantitative approach by distributing 150 questionnaires to accounting professionals using a convenience sampling method. The study articulates Hofstede's cultural dimensions such as power distance, individualism vs. collectivism, uncertainty avoidance, masculinity vs. femininity, long term vs. short term, indulgence vs. restraints, and secrecy vs. transparency in accounting practices, as well as Gray's accounting practices such as professionalism vs. statutory control, uniformity vs. flexibility, conservatism vs. optimism, and secrecy. The study then employs Exploratory Factor Analysis (EFA), Principal Component Analysis (PCA), and Varimax extraction to determine the influence of cultural variables on accounting practices. The extracted factors are accommodated in the multiple regression model to ascertain the impact of cultural dimensions and accounting practices. The current findings emphasize that power distance and individualism are the most dominant cultural dimensions in the given context, resulting in uniform and secretive accounting practices. As a result, the study develops a model tailored to the Sri Lankan context which incorporates the dimensions of Hofstede and Gray. The study demonstrates that a thorough understanding of cultural influences is critical to the success of the process of accounting standard adoption.Item Impact of Integrated Reporting Disclosure Level on Value Relevance of Accounting Information - Evidence from Listed Companies in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Basnayaka, B. M. S. B.; Priyadarshini, P. L. W.The introduction of Integrated Reporting Framework by IIRC addressing the need of governing the disclosure of Non – Financial information in corporate annual reports significantly enhanced the accounting information’s value relevance. However, some studies concluded that disclosures do not enhance the value relevance of accounting information. Hence, the current study validates those contradictory ideas & concludes how impacts accounting information’s value relevance in the Sri Lankan context. For that purpose, the current study selected 38 listed companies considering four years of study periods. The disclosure level measured using “ Disclosure checklist” and accounting information’s value relevance measured using proxy measure of the “firm value” by taking the market price per share six months after each financial year ends. This study found that there is an increasing trend among the listed companies in the selected sample in terms of disclosures. However, the extended price model revealed the increasing level of disclosures negatively impacted on firm value or accounting information’s value relevance. The signaling theory considered in this study justified that corporate report user’s reaction to the signals provided through integrated reports with increased level of disclosures resulted in such negative impact regardless of the quantity of information provided through . Hence, this study contributes to the current literature by justifying the negative impact of disclosures on accounting information’s value relevance from signaling theory perspective.