Commerce and Management
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Item The Impact of IFRS Adoption on Quality of Accounting Information: Evidence from Sri Lanka(Faculty of Commerce and Management Studies, University of Kelaniya., 2019) Yasas, T. G.; Perera, H. A. P. L.The aim of this study is to examine the effect of International Financial Reporting Standards (IFRS) adoption on quality of accounting information in terms of value relevance of listed manufacturing companies in Colombo Stock Exchange. At present, countries are mandated or permitted to apply IFRS in preparation of their financial statements. There are many studies available on IFRS adoption internationally. However, there is no clear evidence that IFRS adoption enhances the quality of accounting information pertaining to Sri Lankan context. This study employs 29 listed manufacturing companies with both pre-IFRS (2009-2011) and post-IFRS (2013-2015) information. Data were analyzed using multiple regression method. Results showed that value relevance of accounting information has not significantly improved in the post-IFRS period than the pre-IFRS period. Further studies are encouraged to conduct on investigating the impact of IFRS adoption on the quality of accounting information by expanding the sample size.Item The Value Relevance of Accounting Information: A Comparison between Published Interim and Annual Financial Statements(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Weerasinghe, P.S.M.; Karunarathna, W.V.A.D.Main objective of the accounting information is providing useful information to stakeholders of the entity. Current and prospective investors are the most important users of such information. Public Listed Companies in the stock market use financial statement as one of the main medium of communication with their stakeholders. Value relevance can be defined as the ability of information disclosed by financial statement to capture and summarize firm value. Investors predict future performance through existing accounting information. When the economy changes time to time investors need to be referred timely information for the investment decision making. If the investors depend on outdated information, investment decision will become inappropriate and ineffective. On the other hand, investors can obtain the short-term financial progress from the interim quarterly financial statements and also they can use audited annual financial reports after completing the accounting year. Therefore, the purpose of this study is to distinguish the value relevance between interim financial statements and the audited annual financial statements in Sri Lanka context. The study is based on 35 listed manufacturing companies in the Colombo Stock Exchange (CSE) for the period of 2012 to 2017. The relevant data were gathered from the published interim financial report, audited annual financial statement and publish research articles. Earnings per share, book value per share, dividend per share and return on equity are use as key independent variables. Data were analyzed using correlation and regression analysis through E-views software. The results show that the interim financial statement appear to have higher value relevance than annual financial statement and value relevance of accounting 4th International Conference for Accounting Researchers and Educators 61 information has the significant impact on share price and value relevance of accounting information is significantly correlated with the share priceItem The Impact of IFRS Adoption on Financial Statements and Value Relevance: Evidence from Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Dissanayaka, H.M.K.G.L.B.; Karunathna, W.V.A.D.The aim of this study is to explore the effect of International Financial Reporting Standards (IFRS) adoption on commonly employed financial ratios and investigate the value relevance of IFRS adoption by comparing the association between accounting measures and market values under GAAP and under IFRS of listed manufacturing companies in Colombo Stock Exchange. This study employs 20 listed manufacturing companies with both pre-IFRS (2009- 2011) and post-IFRS (2013-2015) information. Data were analyzed by using panel data regression model and correlation analysis. And also T test and Wilcoxon signed rank test are used to explore the effect of IFRS adoption on financial ratios. Results of the study showed that IFRS adoption does not significantly change the central values that depict the financial position and performance of Sri Lankan companies in financial statements. Therefore value relevance of accounting information has not significantly improved in the post-IFRS period than the pre-IFRS period. However several financial statement measures and ratio are affected significantly in transition to IFRS. Further studies are encouraged to conduct on investigating the impact of IFRS adoption on financial statement and value relevance by expanding the sample size with incorporating more accounting quality measurement indicators, measurement and ratiosItem The Impact of International Financial Reporting Standards Adoption on the Value Relevance of Accounting Information: Evidence from the Public Listed Manufacturing Companies in the Colombo Stock Exchange in Sri Lanka(4th International Conference for Accounting Researchers and Educators, Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka, 2018) Athukorala, A.S.P.; Karunarathna, W.V.A.D.The purpose of this study is to investigate the impact of International Financial Reporting Standard (IFRS) adoption on the value relevance of accounting information in Sri Lanka and also the study has made a comparison between the value relevance of accounting information in pre- and post- adoption periods of IFRS. Sri Lanka has adopted Sri Lanka Financial Reporting Standards (SLFRS) which is almost aligned with the IFRS with effect from 1st January 2012 onwards. This study employs Ohlson (1995) price regression model to explain value relevance of accounting information. It explains market value per share (MPS) using earning per share (EPS) and book value of equity per share (BVEPS). The pre-IFRS period consist of 5 years from 2007 to 2011, and the post-IFRS period is 5years from 2012 to 2016. The sample comprises 28 firms and 280 firm-year observations. There are many studies available on IFRS adoption internationally. However, there is no clear evidence that IFRS adoption enhances the quality of accounting information pertaining to Sri Lankan context. Mainly the data were analyzed by using multiple regression model and correlation analysis. Results of the study showed that value relevance of accounting information has not significantly improved in the post- IFRS period than the pre-IFRS period. Further studies are encouraged to conduct by expanding the sample size and incorporating more accounting quality measurement indicators.Item Association of accounting information on stock prices of licensed commercial banks in Sri Lanka(Department of Accountancy, University of Kelaniya, 2015) Perera, R.M.S.M.; Gunaratne, Y.M.C.The value relevance of accounting information has become one of the most researched area among accounting researchers. However the value relevance literature provides contradictory conclusions on the association between accounting information and stock prices in different stock exchanges including both developed and developing market settings whilst there is a very limited knowledge in this regard in Sri Lankan Context. Hence this paper focused on examining the association between accounting information and stock prices of licensed commercial banks in Sri Lanka to bridge the knowledge gap in Sri Lankan context. The study conducted based on the hypothesis that there is significant association between accounting information and stock prices in licensed commercial banks in Sri Lanka. Core Capital Adequacy Ratio, Total Capital Adequacy Ratio, Net Non Performing Advances Ratio, Interest Margin, Return on Assets, Return on equity and Statutory liquid Assets Ratio were used as proxy for accounting information. The sample period of the study spans for 5 years from 2007 to 2011. The relevant data was collected from the CSE data library and the published annual reports of all the licensed Commercial Banks whose data is available for the sample period. Both descriptive statistics and inferential statistics were used to analyze data. The statistical analysis revealed that 36% of variations of share prices of Licensed Commercial Banks in Sri Lanka could be explained through the independent variables under study. Further this study revealed that there is a significant relationship between share price and Interest Margin, Return on Equity and Return on Asset. Accordingly this study concluded that there is an association between the accounting information and the share prices of the licensed commercial banks in Sri Lanka hence the accounting information is value relevance in determining share prices of such companies.