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The effect of leadership style on employee satisfaction
(Department of Accountancy, University of Kelaniya, 2015) Chamika, M.W.
Leadership style is one of the most important factors for organization and employee performance. Therefore very important to find the impact of leadership style on employee job satisfaction and as well as on firm financial performance. There are three types of leadership styles. Transformational leadership style was seen to have a positive effect on various facets of employee job satisfaction. Transactional leadership also turned out to be perceived as having a positive effect on different facets of employee job satisfaction. So did laissez-faire leadership Sanders (2007). Objective of this research is to found the influence of Leadership style to the employee job satisfaction. According to this research the dependent variable is employee job satisfaction and Independent Variables are Leadership Styles. Relating to this research topic other researchers use the primary sources to collect evidence of dependent variables and secondary data to collect evidence of independent variables. Given the presence of multiple dependent variables, this research uses ANOVA to analyze the effect of leadership styles on employee satisfaction and employee performance. Employee job satisfaction was seen to have a positive effect on the various aspects of employee job performance analyzed (Turner & Muller, 2005).
Influence of corporate social responsibility on firms’ profitability
(Department of Accountancy, University of Kelaniya, 2015) Koshila, T.G.S.
Now-a-days Corporate Social Responsibility is gaining prominence among the organizations of various fields. Organizations now are emphasizing on CSR initiatives by integrating their business operations with the CSR activities to sustain in this competitive world. This study is based on secondary data collected through the company annual reports and company guides. In some cases, some data and information was collected from the websites of the sampled firms, different articles and papers. Data were collected for last Six year periods. To measure the profitability data were obtained through annual reports of selected Five Banks. The main purpose of this study was identifying the relationship between Corporate Social Responsibility and firms‟ performance. The relation between CSR activities and Firm value .more important is, perhaps, the lack of understanding about the channels through which CSR affects Firm value. There is a direct link between CSR and Firm value in this show, impact of CSR on Firm value depends on the ability of CSR to influence stakeholders in the Firm. In order to answer these research questions, quantitative method will be used. Furthermore qualitative analysis also conducted to find out what are fields banks invested as CSR. Bank wise analysis was conducted and finally goes for a conclusion of sector.
Impact of fair value disclosure of financial instruments in a bank for the fair presentation
(Department of Accountancy, University of Kelaniya, 2015) de Silva, U.
This research is based on the study of the impact of fair value disclosure of financial instruments in a bank for the fair presentation. Study whether it affects to the decision makers. For many years, users of financial statements have sought relevant and timely information about financial instruments and offbalance sheet items and activities. It is believe that fair value measurements and recognition of these values in the financial statements, along with adequate disclosures, will provide necessary information to evaluate properly an enterprise’s exposures to financial risks, as well as rewards (Anonymous, 2002).It is mandatory requirement by IFRS 7, firms to disclose fair value estimates of financial instruments. This paper contributes to assess the accounting practices of disclosure requirements of fair value of financial instruments in Sri Lankan banks. Whether fair value reporting reflects the economic reality by showing the volatility inherent in the values of financial instruments given changes in market conditions and operations of the enterprise (Anonymous, 2007). There are some important conceptual and practical issues relating to the reliable determination of fair value, it is better to first require full fair value disclosures before contemplating a shift to full fair value recognition in financial statements. That would enable investors, creditor, preparer, auditors, and regulators to learn from experience (Chea, 2011). This research is based on the secondary data. Secondary data will be collected by analysing the financial statements of 25 banks in Sri Lanka for the period of 5 years and referring research studies, empirical reports, and articles.
The impact of customer retention and customer service quality on customer satisfaction in the Sri Lankan banking sector
(Department of Accountancy, University of Kelaniya, 2015) Madushanka, G.G.A.S.D.
It is obvious that customers are important stakeholders in organizations and their satisfaction is a priority to management. Customer satisfaction has been a subject of great interest to organizations and researchers alike. In recent years, organizations are obliged to render more services in addition to their offers. The quality of service has become an aspect of customer satisfaction. It has been proven by some researchers that service quality is related to customer satisfaction. Others used service quality dimensions to evaluate service quality. s. The emergence of new forms of banking channels such as Internet banking, Automated Teller Machines (ATM), phone banking and also maturing financial market and global competition have forced bankers to explore the importance of customer loyalty. (Ganjinia, Gilaninia, & Tajani, 2013) Therefore, studies need to focus on the changing role of the banking system and its dynamic financial market. This study will be undertaken with the objective of finding out the impact of the service quality on customer‘s satisfaction in banking sectors. For this study, Quality of services will be evaluated by reliability, functionality, responsiveness service design and assurances, and also reviewed with help of the GAP (SERVQUAL) analyze. Primary data will be collected through by developing self-administered questionnaire from the selected customers. Formal Interview and focus group discussion will be taken place to find out the influences on purchasing. The data will be contained the personal details, demographic details and perception of Customers on all dimensions of service quality. Such analysis will be helpful to guide to actions that must be taken by the service provider to retain it’s predict customers.
Effect of financial leverage on firm size in Sri Lankan manufacturing industry
(Department of Accountancy, University of Kelaniya, 2015) Waniganeththi, W.V.D.A.M.
Companies differ in the use of financial leverage since it depends on a number of factors such as the size, nature of product, capital intensity, technology, market conditions, management attitude etc. Corporate size seems to be one of the most theorized determinants of financial leverage. Each company uses deferent level of financial leverage. But not all the companies are achieved success. Some corporates are achieved high market shares & growth rate. But some firm which has faced bankruptcy because they take more debt than the ability of repayment. There for financial leverage affect to the success of the company. In Sri Lanka, many companies they do not know how to maintain capital structure. So we won’t to known how to maintain capital structure on firm size. The purpose of this Research is to investigate, from a manufacturing market perspective, the firm size as a determinant of corporate financial leverage. Take 5 years data from 3 difference size firms, regression model is used to estimate the relationship between financial leverage and firm size. This research shows how firm size affects to financial leverage in Sri Lankan manufacturing industry.
Application of Sri Lanka accounting standards in small & medium sized enterprises
(Department of Accountancy, University of Kelaniya, 2015) Nishanthi, W.P.L.
Small and Medium Enterprises (SMEs) play an important role in both developed countries and developing countries. It contributes to the growth of the economy through employment generation, new venture development and by opening up new avenues for the growth in the economy. The Central Bank of Sri Lanka (1998) had stated that inadequate capital, inadequate institutional credit facilities, use of outdated technology, improper accounting techniques, inadequate sales promotion competencies and inattentiveness of small businesses are the main problems faced by the small businesses in Sri Lanka. Huck and McEwen (1991) argue that 12 competency areas such as starting a business, planning and budgeting, management, marketing/selling, advertising and sales promotion, merchandising and finance and accounting is needed for small business success. This study is done in relation to the factors leading to non-compliance with Standard accounting practices by the small and medium scale enterprises (SMEs) in Sri Lanka. The main objectives of the study focused on identifying the nature of the accounting practices and the factors leading to non-compliance with standard accounting practices by the SMEs. Efforts are made to examine the possible causes for noncompliance with the Standard accounting practices by the SMEs in Sri Lanka and the researcher expects that this study would fill the knowledge gap. The researcher uses structured interviews to collect data and selects 30 SMEs and 10 auditors for the study. Two interview guides will be prepared by the researcher for the SME owners, and for the Auditors. In the conceptual model the non-compliance is considered as the dependent variable and the independent variables are the cost of adherence to accounting standards, knowledge and competence of the owners, lack of qualified employees, relevance of standard guidelines and parties interested in the financial reports. The key finding is that, higher cost of adherence to accounting standards, lack of knowledge and competence of the owners, lack of qualified employees, and unavailability of parties interested in the financial reports other than owner is leading to non-compliance and the relevance of standard guidelines does not have a relationship with non-compliance. The non-compliance with Standard accounting practices is not only due to SMEs ‘can’t comply’ with them, but also due to not complying with them even when they are able to comply. The researcher finally makes recommendations to the policy makers, government and professional accounting bodies to design the policies and frameworks to ensure SMEs’ compliance with standard accounting practices.
The empirical relationship between board size and firm performance of listed companies in Sri Lanka
(Department of Accountancy, University of Kelaniya, 2015) Weerakkodi, W.A.S.L.
A many studies investigate to the link between board size and firm performance in listed companies in Sri Lanka. The evidence on this area is very thin in Sri Lanka being a developing countries. The structure and size of the board and its impact on the performance of the firm is one of the most discussed issues of corporate governance. Board size, gender, duality, education, board age and Independent were the board structure variables, and ROA and ROE were the measurement device of firm Performance. Good corporate governance practices are regarded as important in reducing risk for investors, attracting investment capital and improving the performance of companies. Sri Lanka does not have large number of studies on corporate governance issues. Therefore, these kinds of studies on corporate governance issues will help to improve the corporate governance practice in Sri Lanka. Therefore, this study will provide a new perspective in studying the relationship between board size and firm performance. The purpose of this study is to examine the relationship between board size and firm performance in Sri Lanka for the extent of compliance of the CBP recommendations by the companies. Further, to investigate the relationship between the CEO duality and firm performance, to investigate the relationship between proportion of non-executive directors and firm performance.
The impact of internet adoption on business performance
(Department of Accountancy, University of Kelaniya, 2015) Sudarshani, P.E.
The growth of information technology in the business world is spreading at a phenomenal rate. The uses of the internet for e-commerce purposes have seen a high increase due to growth in websites for commercial purposes (Gilmore et al, 2007).The success of a business organization stands at the usage of IT in their business. Internet based ICT practices also contribute to the increase of productivity in SME in developing countries (Jayathilake et al, 2008). SMEs under the BOI (Board of Investment) in Sri Lanka are far behind the fast moving world of IT. Though E-Commerce is accelerating at a high pace, most of the SMEs are still at the lower level compared to their competitors in business. This study identifies the major determining factors in Sri Lanka small and medium sized enterprises’ (SMEs) e-commerce adoption, offers practical implications, and indicates the actions required. This research integrates technological, organizational, and environmental determinisms with social constructivism to build a practical framework for understanding Internet adoption among SMEs in Sri Lanka. In this research best collecting data evidence is primary evidence and the questionnaire was the main element for this research. SPSS software was used for analysis purpose. Analysis will be carried out to identify the relationship between the adoption of E-Commerce or Internet and the firm Performance. The results of that E-Marketing will affect the adoption of E-Commerce and therefore it is proven reasonable to consider Internet and hopefully the research will help to convey the awareness among the SME towards E-Commerce and help them to speed up their involvement in E-Business.
Significance and issues in environmental reporting
(Department of Accountancy, University of Kelaniya, 2015) Hewawasam, H.S.M.
At present, the attention of stakeholders regarding the information about the organizational impact on the physical environment has been significantly increased in developing countries as well as in developed countries. Several organizations use their Environmental Reporting to notify stakeholders of how well they dealt with the environmental impacts. Even though Environmental Reporting gives an opening to demonstrate their accountabilities to the society, the current environmental disclosures do not suitably match with the information needed by various groups of stakeholders. This paper enquires about the importance of Environmental Reporting, the existing reporting methods and practices, deviations between the guidelines which companies follow and actual reporting disclosures and to disclose reasons to the lack of supply in such information as well as the significant methods that can be practiced in order to satisfy the Global Reporting Index, Act No. 47 of 1980, Central Environmental Authority, Sri Lanka and other additional generally accepted guidelines. This research reveals that both in developed countries and in developing countries, the fluctuations of information occurs due to the absence of Accounting Standards, Regulations or Rules for environmental reporting which can convince the informational needs of relevant stakeholders.
The relative importance of working capital management and its components to SMES’ profitability
(Department of Accountancy, University of Kelaniya, 2015) Priyadarshani, M.R.
The focal point of extant research is the importance of working capital management (WCM), measured by cash conversion cycle (CCC), and all its components (inventory, accounts receivables and accounts payables) on the profitability of predominantly large firms (Deloof, 2003; Padachi, 2006; Garcia-Teruel and Martinez-Solano, 2007; Banos-Caballero et al., 2010). Such research has been carried out on the implicit assumption that large firms have the necessary resources (e.g. financial, technology and personnel) to manage all components of working capital. Literature on SMEs, however, suggests that such firms have limited resources compared to their large firm counterparts that may prevent them from managing all components of working capital. For example, research has found that SMEs are poorly managed due to the lack of management competence of their owner-managers (Gockel and Akoena, 2002; Pansiri and Temtime, 2008). The Small Business Research Centre (1992) also found management skills to be one of the barriers to SMEs’ growth. The nature of the relationship between WCM and profitability depends on the strategy that the firm decides to pursue (Weinraub and Visscher, 1998; Garcia-Teruel and Martinez-Solano, 2007; Nazir and Afza, 2009). A firm can also adopt a conservative strategy to WCM which advocates an increase in investment in working capital. This strategy is adopted with the view of stimulating sales by increasing both inventories and receivables in order to increase profitability. An increase in inventories can prevent production disruptions (Garcia-Teruel and Martinez-Solano, 2007). The relationship between WCM measured by the CCC and profitability was found to be negative and significant by Raheman et al. (2010), Hayajneh and Yassine (2011) and Karaduman et al. (2011), consistent with the aggressive strategy of WCM. However, a positive and significant relationship was reported by Raheman and Nasr (2007), Mathuva (2010), Nobanee and Alhajjar (2009) and Stephen and Elvis (2011), which supports the conservative strategy of WCM.
The impact of credit risk management on profitability of commercial banks
(Department of Accountancy, University of Kelaniya, 2015) Navoda, G.N.
Banks today are the largest financial institutions around the world, with branches and subsidiaries throughout everyone’s life.However, commercial banks are facing risks when they are operating.Credit risk is the one of the significant risk that banks face, considering that granting is one of the main source of income in commercial banks in Sri Lanka.Thereforthe management of the risk related to that credit affect the profitability of the banks. The main purpose of the research is to investigate if there is a relationship between credit risk management and profitability of commercial banks in SriLanka.Also aim to find out if the relationship is stable or fluctuating. In the research model, ROE and ROA are measurement tools of profitability and NPLR and CAR are defind as tools of credit risk management. This study covers 24 commercial banks in Sri Lanka, and 24 commercial banks were identified as the sample. The analyze has been made the credit risk management and its impact on profitability capacity during 2010 to 2014 (04 years) financial year of commercial banks in Sri Lanka.The research data collect from annual reports of sample banks.Correlation and multiple regression analysis are used for analysis. The findings reveal that positive relationship between credit risk management and profitability. And also credit risk management is significant impact on profitability of commercial banks, from 2010 to 2014, the relationships between all the representations are not stable but fluctuating.
Corporate governance issue to the business failure
(Department of Accountancy, University of Kelaniya, 2015) Madhubhashini, H.M.T.S.
Corporate governance is the process to control and direct the companies for long term results. There has been many ways to achieve this via good corporate governance but failure of some big companies raised various questions and issues. This study is motivated by the numerous reforms to strengthen the efficacy of corporate boards and their oversight committees, in the wake of high profile corporate failures. The empirical question, however, is whether recent proposals would enhance board and their committee effectiveness and in this way, reduce the likelihood of firm‘s failure. This study examines whether the composition, structure and functions of corporate boards and their interactions are related to the probability of corporate failure. The objective of this study is to find out the relationship between Corporate Governance issue and the Business Failure. As the methodology of this study, the all data will be collected through the secondary sources. The corporate governance will be measured by the terms; Accountability, Integrity, Transparency and Efficiency. The Business Failure will be measured by the Liquidity ratio, Defaulting long term loans, Continues losses, resigning top management people without refilling and over trading of the selected firms. The conclusion of this study is; there is a relationship between Corporate Governance and the Business Failure. Also there is a significant impact on Business Failure from the Corporate governance issue.
Importance of management accounting for competitive decision making in Sri Lanka
(Department of Accountancy, University of Kelaniya, 2015) Bandula, M.G.V.M.
In the conditions of company operation globalization, the increasing use of information technology, increasing complexity of business transactions, and increasing business risk, the role of competitive management accounting is becoming increasingly important, especially in making strategic business decisions. As a part of strategic management accounting, competitive management accounting positions the company to a place which has the best view of the existing and potential competitor activity, by creating a strong information base on competition, all with the aim of creating added value and improving the company operations. This paper aims to highlight the importance of competitive management accounting in strategic decision making, and on the basis of case studies in the world and empirical research conducted in Sri Lanka, to highlight the importance of competitive management accounting in the world and to answer the question of whether the companies in Sri Lanka use the information from competitive management accounting in business decision making.
The impact of credit risk management on the performance of banking sector
(Department of Accountancy, University of Kelaniya, 2015) Abewardhana, M.A.
Credit risk management in banks has become more important not only because of the financial crisis that the industry is experiencing currently, but also a crucial concept which determine banks’ survival, growth and profitability. The aim of this study is to investigate the impact of credit risk management on the performance of banking sector in sir Lanka. Financial reports of seven commercial banking firms were used to analyze for seven years (2005 – 2011). The panel regression model was employed for the estimation of the model. In the model, Return on Equity (ROE) and Return on Asset (ROA) were used as the performance indicators while Non-Performing Loans (NPL) and Capital Adequacy Ratio (CAR) as credit risk management indicators. The findings revealed that credit risk management has a significant impact on the profitability of commercial banks’ in sir Lanka. Banks today are the largest financial institutions around the world, with branches and subsidiaries throughout everyone’s life. Commercial banks are facing risks when they are operating. Credit risk is one of the most significant risks that banks face, considering that granting credit is one of the main sources of income in banks. The management of the risk related to that credit affects the profitability of the banks. The aim of the research is to provide stakeholders with accurate information regarding the credit risk management of banking sector with its impact on profitability.
The investment of information technology on performance of the organization
(Department of Accountancy, University of Kelaniya, 2015) Pathirana, M.P.D.M.
Many organizational leaders and strategy scholars would agree that the ability to effectively manage information within the firm has become critically important because it may provide a basis for gaining a competitive advantage (Tippins, 2003).Many business people invest large amount of funds for information technology to improve the performance of the organization. The objective of this research is to find the relationship between investment of IT and firm performance of the manufacturing organizations. According to this research independent variables are amount of investment of IT, Investment of IT percentage of total assets and Investment of IT percentage of total investment. Dependent variable is Return of assets (Weill,1992).Secondary evidence used for this research. Ten years of historical data on IT investment and performance was collected using Annual reports of CSE website. In the recent past, researchers have shown conflicting results regarding the returns to IT investment. Some researchers posit that the equivocal results of IT investment are due to inconsistent measurement of firm performance and investment (Lim, Richardson, Roberts, 2004).To gain best result used SPSS tools for analyze the variables and data. The important of this research is to gain more knowledge about IT and its effect of the organizations.
The effect of capital structure on profitability in Sri Lankan company
(Department of Accountancy, University of Kelaniya, 2015) Madhubhashani, M.A.C.D.
The capital structure decision is essential for any business organization. To understand how companies finance their operations, it is necessary to examine the determinants of their financing or capital structure decisions. Weston and Bringham (1978) define capital structure as the permanent financing of the firm represented by long-term debt plus preferred stock and net worth. Capital structure decision is the vital one since the profitability of an enterprise is directly affected by such decision. The successful selection and use of capital is one of the key elements of the firms’ financial strategy (Velnampy & Aloy Niresh, 2012). This paper seeks to investigate the relationship between capital structure and profitability of listed companies on the Colombo Stock Exchange (CSE) during a five-year period. In order to meet the objectives of the study, data will collect from secondary sources mainly from financial report of the selected companies and regression analysis is used as the methodology in this paper. Variables used for the analysis include profitability and leverage, equity ratios. Profitability measured by Return on Assets (ROA). Expected outcome of this paper is to develop a theory relating to the capital structure and profitability based on the Sri Lankan Context.
The effects of corporate governance on firms’ credit ratings
(Department of Accountancy, University of Kelaniya, 2015) Karunarathne, R.M.H.L.
We investigate whether firms that possess strong corporate governance benefit from higher credit ratings relative to firms with weak governance. A firm’s credit rating reflects a rating agency’s opinion of an entity’s overall creditworthiness and its capacity to satisfy its financial obligations Credit agencies are concerned with governance because weak governance can impair a firm’s financial position and leave debt stakeholders vulnerable to losses To structure our analysis, we adopt a framework developed by Standard & Poor’s for assessing firms’ corporate governance structures and practices. In the case of Sri Lanka that have thoroughly validity because of investors will not be satisfy with the week financial position to invest of the firms. Therefor this has a practical validity to the firm to maintain their financial stability in order to satisfy investor’s preference. So as I develop this to exhibit what kind of validity that the firm has to the corporate governance on firm’s credit ratings. Rather I try to come up with the sensible area of this topic in order to give a clear and feasible view of the topic.
Adoption of information technology to productivity changes in the Sri Lankan banking industry
(Department of Accountancy, University of Kelaniya, 2015) Fernando, P.
The rapidly increasing use of computers in producing and delivering goods and services has spurred a large literature on the effects of information technologies (IT) on productivity growth (Casolaro & Gobbi, 2004). Information and communication technology (ICT) can be considered the key factor driving economic growth in industrial societies. Investing in IT is widely regarded as having enormous potential for reducing costs, enhancing productivity, and improving living standards (Hajl, Sims, & Ibragimov, 2013). In recent years, greater competition in SL banking has been driven by technological change, internationalization and globalization of financial services, higher demand for banking services and deregulation and privatization of the industry (Figueira, Nellis, & Parker, 2009). The Internet has provided an environment in which information can travel across organizational and geographical boundaries (Dasgupta, Sarkis, & Talluri, 1999). Comparison of ICT investment to all other expenditures connected with the production process illustrates the growing significance of ICT in the modern economy as a factor of production (Hajl, Sims, & Ibragimov, 2013). The purpose this research is to observe whether Information technology is an indicator of a poductivity. The sample for this research will be obtained from the Sri Lankan listed commercial banks. The objective of this research is to findout to identify relationship between information technology and productivity changes.
Association of financial practices and performance of the small sized enterprises in Sri Lanka
(Department of Accountancy, University of Kelaniya, 2015) Manike, H.M.S.W.P.
Small and medium size enterprises (SMEs) involve with economy through contributing to growth of gross domestic product (GDP), in contributing to decrease unemployment, creating innovative and so on. But to development of SMEs, it is needed to effective record keeping, efficient use of accounting information to support financial decision-making and the high quality and reliability of financial data, effective financial management practices and use of SLFRS for SMEs. The objective is to find out wheher the finacial practices of SMEs have any significant relationship with performance of companies.For this analysis, categorize SMEs accordinga to World bank classification that is based on number of employees.Up to 50 employee from 10 identify as small business and up o 300 from 50 identify as medium size companies.The data which required for the analysis are collected through questionnaire and reffering relevant financial statement of the selected companies. Firstly, questionnaire are used to identify how the SMEs uses financial practices.In here consider about preparation of financial statement , auditing financial statement , control inventory , inventory management , utilize the computer system to repoting transaction. Secondely, financial statement are obtained for 5 years period to analyse the relation between finacial pracices and performance through financail ratios. This study expect to find out firstly. the differntion of financial practice between small and medium size enterprises. Secondely, there is a significant relation between fianacial practice and performance of enterprices.Finally through this analysis expect to indicate the significance of financial practices to SMEs to improve SMEs financial performance.
Impact of capital structure for business performance in Sri Lanka
(Department of Accountancy, University of Kelaniya, 2015) Fernando, W.R.S.
The discussion about the optimal capital structure has been a main topic in corporate finance from several years in Sri Lanka. Capital structure defines as a combination of debt as well as equity in an organization. Organizations have multiple financing sources. It can be categorize into two sources, the internal financing which includes common stocks, preferred stocks, reserves and retained earnings. Another source called external financing which consists short and long term loans and bonds issuance. It is challenging for organizations to identify the right mixture of debt and equity to achieve organizations goals. This research paper will examine the relationship between capital structure and business performance of public listed companies in Sri Lanka. The multiple linear regression and correlation were used to examine the relationship between capital structure and business performance. The sample of the study consisted of 20 public listed companies in Sri Lanka. This analysis is done by analyzing the financial statements of these companies from 2010-2014. Another expected Finding is the firm characteristics factors which also influence on business performance. The outcome of the statistical analysis made known that TDR and STDA has significant negative influence on the organization performance of business evaluated by ROA. The relationship in between ROA and TIE is positive as well as significant. However, DER and LTDA have negative but insignificant influence on ROA.