Volume: 3 Issue: 2 - 2023
Permanent URI for this collectionhttp://repository.kln.ac.lk/handle/123456789/29872
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Item Effects of Non-Performing Loans & COVID-19 Pandemic on the Performance of Commercial Banks in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Silva, M. T. M.; Perera, W. T. N. M.; Madhushani, H. G. I.The COVID-19 pandemic has significantly impacted the global economy, and the non-performing loans (NPLs) have become a pressing issue for commercial banks in Sri Lanka. It is doubtful how the NPLs and COVID-19 Pandemic have affected the performance of commercial banks in Sri Lanka. Thus, the purpose of this study is to investigate effects of non-performing loans & COVID-19 pandemic on the performance of Sri Lankan commercial banks for the period of 2011 - 2021. The panel data regression analysis was used to investigate the effects of non-performing loans & COVID-19 pandemic on the financial performance of Commercial Banks. The results of the analysis revealed that non-performing loans and the pandemic period have a negative impact on the profitability of commercial banks in Sri Lanka. Thus, this study is useful for bank management officials to protect banks from crises and create ideas to enhance the performance of banks.Item Enterprise Risk Management Practices and Financial Performance of Apparel Industry in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Athuraliyage, N. M.; Liyanage, C. J.The apparel industry plays an important role in the Sri Lankan economy. However, based on the previous literature, apparel factories continuously face many internal and external risks and business recessions that affect their performance. Therefore, the main objective of this study is to identify the impact between enterprises' risk management practices and firm’s financial performance. To achieve the said objective, researchers carried out a questionnaire-based survey of 167 managers who were involved in enterprise risk management in the apparel industry in Sri Lanka, applying a simple random sampling method. This study is quantitative research that adopts ontological and positivist research philosophy. The Statistical analysis has been done through correlation coefficient analysis with the SPSS software. Results found that small apparel factories' risk management systems turned out to be relatively weak and informal. Further, firm size and management attitude toward risk have been shown to significantly impact enterprises’ risk management practices and company financial performance. The findings confirmed a strong positive correlation between risk management practices and financial performance in the Sri Lankan apparel sector.Item The Impact of Corporate Governance on Financial Distress: Evidence from Listed Financial Institutions in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Perera, T. M. A. Y. M.; Munasinghe, M. A. T. K.This study focuses on the role of corporate governance in predicting financial distress of companies in the finance sector in Sri Lanka. Over the past two decades, several finance sector companies collapsed in Sri Lanka affecting numerous victims with no proper compensation payments. The study aims to unveil the impact of corporate governance on financial distress of companies in the financial sector. A number of key variables included to measure the corporate governance such as board size, board gender diversification, frequency of board meetings, audit quality, board member remuneration, CEO duality, education level of the board members, and board independence. As control variables firm size, profitability, and financial leverage are considered. Financial distress is operationalized through the measures of institutions negative profit, cash flow, or worth for three consecutive years. Data from 54 listed financial institutions in Sri Lanka were collected from 2017 to 2022. Descriptive analysis, Pearson correlation analysis, corporate governance comparison model, and regression analysis were employed for data analysis. The findings indicate that board size, board gender diversification, frequency of board meetings, higher audit quality, education level of the board, board independence, and return on equity have a significant negative impact on financial distress. These findings can help identify at-risk financial institutions, support decision-making for investors and stakeholders, guide the implementation of corporate governance policies, and inform policymakers in developing new governance policies.Item The Impact of Audit Quality on Earnings Management: Evidence from Listed Companies in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Madhushani, H. G. I.; Sujeewa, G. M. M.Earnings Management (EM) is related to the manipulation of reported income through accounting practices and decisions. With the occurrence of numerous financial collapses and failures, the reliability of the audit function has been challenged, as auditors play a critical role in expressing an opinion on the financial statements. This study investigates the impact of Audit Quality on EM in Sri Lankan listed companies. This study employs Modified Jones model to examine earnings management practices through Discretionary Accruals (DA). The selected proxies of audit quality which are Length of Audit Tenure, Audit Firm Size and Auditor Independence are the independent variables. The data is collected from annual reports for the financial periods 2015 - 2020 and audit reports for the financial period 2012 - 2020 of listed companies on the Colombo Stock Exchange (CSE). This study employed descriptive statistics, correlation analysis, and multivariate analysis to analyze the data. Based on the quantitative analysis, the results demonstrated that the association between audit firm size and earnings management in Sri Lankan listed companies is negative and significant. It was found that the level of EM between companies using Big 4 auditors and those using non-Big 4 auditors is much lower. This study revealed that auditor independence and EM have a significant negative association. It was suggested that independent auditors have a greater ability to regulate and identify EM activities through company management. Further, this study exposed that there is an insignificant association between the length of audit tenure and earnings management. These findings are useful to shareholders in appointing or reappointing auditors. Furthermore, this study enables stakeholders, including regulatory bodies, to examine the presence of EM practices in listed companies of CSE.Item Financial Management Practices and Small and Medium-scale Enterprises' Performance in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Sandaruwandi, S. V. C.; Panditharathna, K. M.; Rathnayake, S. S.Small and Medium-scale Enterprises (SMEs) add value to an economy by creating employment, contributing to Gross Domestic Production (GDP), making innovations, and minimising poverty. They are partnering with the development of the country. Most small and medium-scale enterprises face issues like lack of knowledge, outdated skills, fear of taxation, adoption of accounting standards, and accounting information records. Therefore, this study aims to identify the relationship between financial management practices and SMEs' performance in the southern province of Sri Lanka. This study measures financial management practices using financial reporting analysis, working capital management, fixed asset management, and accounting information systems. SME performance was measured by the profitability of SMEs using return on assets. Considering data constraints, time constraints, and the COVID-19 situation, 107 Small and Medium Enterprises operating in the manufacturing and service sectors were selected as samples. A questionnaire was chosen as the primary data-gathering method. The sample was chosen using a convenience sampling procedure, and the data were analysed using the Statistical Package for Social Scientists (SPSS) software. Multiple regression analysis was done to examine the hypothetical association. This study found that financial management techniques such as fixed asset management, working capital management, accounting information systems, and financial performance of SMEs have a significant association with performance. The findings support aiding investors, workers, and policymakers in making effective decisions.