2nd ICARE Student's Conference - 2016
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Item Challenges of IFRS Convergences of Insurance Industries in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Premarathna, H.S.M.; Bandara, R.M.S.The Institute of Chartered Accountants of Sri Lanka (CASL) committed to convergence International Financial Reporting Standards (IFRS) with effect from 1st January 2012. The convergence have been generated significant challenges and problems on financial reporting in the terms of recognition, measurement, disclosures on accounting policies, consolidation and reporting to the insurance companies operated in Sri Lanka. This research highlights the challenges in convergence of IFRS in Sri Lankan insurance sector and the possible ways to overcome those challenges. The qualitative method was used for the study based on both primary and secondary data gathered from interviewing of selected insurance companies and annual reports. The measures taken by CASL and the other regulatory bodies to facilitate the smooth convergence to IFRS were admirable. The remedial actions such as consulting reputed audit and advisory firms relating to IFRS issues, giving foreign learning opportunity to the accounting staff to obtained the IFRS knowledge, the knowledge of IFRS on newly recruited accounting staff have been taken to overcome the problems and challenges.Item Impact of Credit Risk Management on Profitability of Licensed Finance Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Madusanka, A.P.; Bandara, R.M.S.The Licensed Finance Companies (LFCs) sector plays a prominent role within the financial system in Sri Lanka. LFCs are dealing with massive loan portfolio in the country and credit risk is one of the most significant risks which is faced by LFCs. The main purpose of the research is to investigate impact of credit risk management on profitability of LFCs in Sri Lanka. In the research model, Return On Assets (ROA) and Return On Equity (ROE) are the indicators for Profitability of LFCs, and Gross Non- Performing Loans (GNPL), Provision for Loss Facilities / Credit Facilities ratio (PLFCF), Total Credit Interest/Credit Facilities ratio (TCICF), Credit Recovery Cost/Credit Interest ratio (CRCCI), and Capital Adequacy Ratio (CAR) are indicators for credit risk management. The research collected data from 30 LFCs in Sri Lanka from 2011 to 2016 and formulated five hypotheses to achieve the research objective. A series of statistical tests were performed in order to test the impact of credit risk management on profitability of LFCs in Sri Lanka. Results disclosed that there is a significant negative impact of the credit risk indicators of GNPL and PLFCF on profitability of LFCs in Sri Lanka and Overall findings revealed that there is significant impact of credit risk management on profitability of LFCs in Sri Lanka. This finding indicates that the better the credit risk management is, the higher the profitability to the LFCs in Sri Lanka.Item Impact of Management Accounting Practices on Financial Performance of Listed Manufacturing Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Madhuka, H.B.N.; Bandara, R.M.S.Management accounting measures analyzes and reports financial and nonfinancial information that helps managers to make decisions, implement strategy to achieve the goals of an organization. The main purpose of this study was to examine the impact of Management Accounting Practices (MAP) on Financial Performance (FP) of listed manufacturing companies in Sri Lanka. Financial Performance was measured by Return on Assets. Costing system, Budgeting system, performance evaluation system, and equity issue and leverage were used as measures of management accounting practices. Total population of 32 manufacturing companies were drawn as the target sample to collect required data for the study. Structured questioner was used to gather primary data and annual reports of the selected companies were used as secondary data sources. Analysis was conducted by using Statistical Package for Social Sciences (SPSS). According to study, it was revealed that there was significant impact of costing system practices to FP and it was the highly practiced and influential MAP amongst the manufacturing companies in Sri Lanka. Further, budgeting system, performance evaluation system, equity issue and leverage respectively showed an impact to financial performance. Thus, it is advisable to manufacturing companies to pay attention for the costing system to improve their financial performance.Item Identification of Influential Factors towards the Investment Decisions: with Special Reference to Individual Investors of CSE(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Waniganeththi, W.V.D.A.M.; Bandara, R.M.S.Individual investors consider various factors to make their investment decisions. The main objective of this study is to identify the most influential factors towards the individual investors’ decisions at CSE. The study was carried out with the sample of fifty respondents representing individual investors in Colombo & Gampaha district. Structured, questionnaire was used to collect data and data was analyzed using descriptive statistical, regression analysis and factor analysis techniques. According to the findings, subjective factors such as reputation of the company and quality of product are more influential than other factors. Among economic factors, capital appreciation was the highly influential factor. Stock Marketability is the mostly influential factor among speculative factors and reputation of the firms is the mainly influential subjective factor. Company ethics are the most substantial factor in cultural factors. Further, it was noted that the companies more focus on capital appreciation in their short term decision making.Item The Effect of Financial Micro Factors on Stock Prices: Special Reference to the Manufacturing Sector in the Colombo Stock Exchange (CSE)(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Nishanthi, W.P.L.; Bandara, R.M.S.The objective of the study was to identify the effect of selected micro variables on the stock prices of selected manufacturing companies listed in Colombo Stock Exchange (CSE). Researcher used the secondary data which was collected from the annual reports of selected companies for the period of 5 years. The sample of 29 companies was selected for this study representing manufacturing sector entities. In this study, Return on Equity, Book Value per Share, Earnings Per Share, Price Earnings Ratio, Dividend Per Share, Dividend Yield, Firm Size, and Financial Leverage were used as independent variables with the Stock Prices as the dependent variable. The data have been analyzed by using descriptive statistics, correlation and regression analysis to find out the effect of the micro variables on the stock prices. According to the results of the overall analysis, there was significant impact of book value per share, dividend per share, dividend yield, firm size and financial leverage on the stock prices. Further, it was identified that there was an insignificant impact of return on equity, earnings per share, price earnings ratio on the stock prices. According to the final result majority of financial micro factors significantly affect to the stock prices.Item Impact of Audit Committee Characteristics on Financial Performance of Listed Finance Companies in Sri Lanka(Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2016) Dissanayake, W.G.P.K.; Bandara, R.M.S.An audit committee is an operating committee of a company's board of directors and it is a compulsory requirement for Sri Lankan listed companies according to the ‘Code of best practices on corporate governance’ published by the Institute of Chartered Accountants of Sri Lanka and Security and Exchange Commission of Sri Lanka. This study was attempt to find out the relationship between the audit committee characteristics such as Size of the Audit Committee, Independence of the Audit Committee, Audit Committee Meeting Frequency, Financial Literacy of Audit Committee Members and financial performance measured by the Return on Assets and Return on Equity of Sri Lankan finance companies. Twenty listed finance companies were selected as sample for the period of 2012 to 2016. Descriptive statistics, correlation analysis and multiple regression analysis were used to analyze the data. According to the analysis, audit committee independence and audit committee financial literacy showed a significant positive relationship with firms’ financial performance. Audit committee meeting frequency significantly related only with financial performance indicator of ROE. However audit committee size did not have significant relationship with firm performance. The results is beneficial to shareholders and companies’ board to make appropriate decisions about audit committee characteristics to enhance firm financial performanc