International Journal of Accountancy

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Subject: search.filters.subject.Corporate governance

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    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.
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    Corporate Governance and Corporate Transparency: A Sri Lankan Case
    (Department of Accountancy, University of Kelaniya, Sri Lanka., 2022) Ratnayake, D. A. W. M. S. P.; Rajakulanajagam, N.
    The main purpose of the research is to explore the impact of corporate governance on the corporate transparency of public listed companies in Sri Lanka. The content analysis was applied to measure the dependent variable, corporate transparency while independent directors, board size, female directors, dual leadership, cross directorship, audit firm size, related party transaction review committee and remuneration committee were used as the variables of corporate governance. This research study covers 100 public listed companies which have been listed on Colombo Stock Exchange in Sri Lanka representing eight sectors and secondary data were gathered from annual reports published on Colombo Stock Exchange for the period from 2018 to 2020. The data analysis was performed through correlation and regression analysis using EViews software. As per the results of regression analysis, it was shown that there is a significant impact of audit firm size and female directorship on corporate transparency. Distinct from the previous empirical research, corporate transparency was measured using a newly updated transparency and disclosure index based on the most recent corporate governance codes in 2017. The outcome of the study gives an insight into corporate governance and corporate transparency to regulators, policymakers, practitioners, researchers and investors by adding value to the existing literature.