Book of Abstracts
2nd Annual International Conference on
Accounting and Finance– 2015
ICAF-2015
25th– 27th May 2015
The International Institute of Knowledge Management (TIIKM)
Colombo, Sri Lanka
Committee of the ICAF- 2015
The International Institute of Knowledge Management (TIIKM)
Fax: +94(0) 113098521
[email protected]
Disclaimer
The responsibility for opinions expressed, in articles, studies and other contributions in this
publication rests solely with their authors, and this publication does not constitute an
endorsement by the ICAF or TIIKM of the opinions so expressed in them.
Official website of the conference
www.financeconference.co
Book of Abstracts of the 2nd Annual International Conference on Accounting and
Finance, 2015
Edited by Dilan Rathnayake and Others
40 pages
ISBN: 978-955-4903-40-1
Copyright @ TIIKM
All rights are reserved according to the code of intellectual property act of Sri Lanka,
2003
Published by The International Institute of Knowledge Management (TIIKM)
Tel: +94(0) 11 3098521
Fax: +94(0) 11 2835571
ii
Hosted By:
Management and Science University, Malaysia.
Independent University, Bangladesh.
Organized by:
The International Institute of Knowledge Management (TIIKM)
ICAF Committee
PROF. P.S.M. GUNARATNE
(Conference Chair, ICAF)
Department of Finance, Faculty of Management
& Finance University of Colombo, Sri Lanka.
DR. PARITOSH BASU
(Session Chair, ICAF)
Senior
Professor,
School
of
Business
Management, The NMIMS University, Mumbai,
India.
MR. ISANKA. P. GAMAGE
(Conference Program Chair, ICAF)
The International Institute of Knowledge
Management
MR. OSHADEE WITHANAWASAM
(Conference Publication Chair, ICAF)
The International Institute of Knowledge
Management
MISS. SUVINIE .S. RAJAPAKSHA
(Conference Coordinator, ICAF)
The International Institute of Knowledge
Management
iii
Editorial Board-ICOM
Board- ICAF -2013
2015
Editorial
Editor in Chief
Prof. P.S.M. Gunaratne, Department of Finance, Faculty of Management & Finance University of Colombo, Sri
Lanka.
Editorial Board
Mr. D. T. Rathnayake, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura, Sri
Lanka
The Editorial Board is not responsible for the content of any research paper.
Scientific
Committee
- ICAF - 2015
Prof.
Oyaziwo
Aluede, Department
Of Educational Foundations And Management, Ambrose Alli
Prof. P.S.M. Gunaratne, Department of Finance, Faculty of Management & Finance University of Colombo, Sri
Lanka.
Dr. Paritosh Chandra Basu, School of Business Management, The NMIMS University, Mumbai, India.
Prof. Chandrasekhar Krishnamurti, School of Commerce, University of Southern Queensland, Australia.
Emeritus Prof. Neave, Edwin, Queens School of Business, Canada.
Prof. Rajendra P. Srivastava, School of Business, The University of Kansas, United States.
Prof. Soumya Guha Deb, The Xavier Institute of Management, Bhubaneswar, India.
Prof. Madhu Veeraraghavan, T.A. Pai Management Institute, Manipal, India.
Dr. Maran Marimuthu, Universiti Teknologi PETRONAS, Malaysia.
Prof. Kamran Ahmed, La Trobe University, Australia.
Dr. Mohd Norfian Alifiah, Universiti Teknologi Malaysia, Malaysia.
Prof. W. Robert Reed, Department of Economics and Finance, University of Canterbury, New Zealand.
Dr. Guneratne Wickremasinghe, Accounting & Finance at Victoria University, Australia.
Prof. Robin H. Luo, La Trobe University, Australia.
Prof. Rafael Hernandez Barros, Universidad Complutense de Madrid, Spain.
Dr. Samiul Parvez Ahmed, School of Business, Independent University, Bangladesh.
Dr. Pavnesh Kumar, Indira Gandhi National Tribal University, India.
Dr. Sarwar Uddin Ahmed, School of Business, Independent University, Bangladesh.
iv
Table of Contents
Page No
Plenary Speech
01. International Convergence of Accounting Standards and Quality of
Financial Reporting
03
Dr. Paritosh Chandra Basu, School of Business Management, The NMIMS
University, Mumbai, India.
Oral Presentations
Sustainability Management both at Corporate and National Level with a 4p*
Approach – Impact of Regulatory Measures
02. Agency Costs or Accrual Quality: What Do Investors Care More
About When Valuing a Dual Class Firm?
09
Assist. Prof. Jagjit S. Saini
03. Impact of Green Accounting on National Policy Decisions
10
Dr. TR. Rajeswari
04. Accounting Analysis of Mining Company in Indonesia under the
New Indonesian Accounting Standard and Good Corporate
Governance Regulations for the Financial Performance in Indonesia
Mining Company
11
Mr. Heykal, Mohamad
Deregulation of Financial Markets and Corporate Governance
05. Corporate Governance and Dividend Pay-out Policy: An Empirical
Investigation on Financially Distressed Firms in Malaysia
15
Dr. Maran Marimuthu
06. Corporate Social Responsibility Development of Banking Industry
in Hong Kong
16
Mr. Yam Tsz Kit
07. Long Run Determinants of Equity Foreign Portfolio Investment
(Efpi) in Sri Lanka: A Time Series Analysis with Autoregressive
Distributive Lag (Ardl) Approach
Mr. G.D. Kapila Kumara
v
17
08. The Effect of Board Size and Composition on the Financial
Performance of Nigerian Banks
18
Dr. Muhammad Tanko
Enhancement of Corporate Financial Performance
09. Is Australian Directors’ Remuneration Linked to the Earning
Predictability of the Company? (Practice in the Australian Stock
Exchange Listed)
21
Mr. Aloysius Harry Mukti
10. Stock Return and Weather: Evidence from Dhaka Stock Exchange
(DSE)
22
Mr. Mohammad Fahad Noor
11. Tri Variate Analysis to Measure Performance Efficiency of Indian
Private Banking Sector
23
Assoc. Prof. Mariappan Perumal
12. Cash Flow Patterns: A Predictive Sign of Financial Distress
24
Assoc. Prof. Amrizah Kamaluddin
Economic Turmoil’s and Stability of Banks and other Financial Institutions
13. Financial Performance differences between privately-owned versus
state-owned banks: Evidence from Bangladesh
27
Mr. Saquib Shahriar
14. Efficiency Comparison between Licensed Commercial Banks and
Licensed Specialized Banks
28
Ms. E.M.N.N. Ekanayake
15. Microfinance Institutions’ Competition in Northern Region of
Thailand
Assist. Prof. Saleepon Ravipan
vi
29
Virtual Presentations
16. The Diffusion of ‘New Public Financial Management (NPFM)
Innovations in Developing Countries: Evidence from Sri Lanka
35
Mr. Thusitha Dissanayake
17. Factors Affecting to Risk Management Efficiency of Listed
Commercial Banks in Sri Lanka
36
Ms. S.D.P.Piyananda
18. The Determinants of Earnings Management: An Empirical Study of
Firms Listed on Hochiminh Stock Exchange, Vietnam
37
Ms. Hoai Anh Le Thi
19. Corporate Governance, Financial Soundness and Economic
Development: Empirical Evidence from Malaysia, Indonesia, and
Turkey
Mr. Wahua Lawrence
vii
38
viii
2nd Annual
International Conference on Accounting and Finance
PLENARY SPEECH
Page | 1
2nd Annual
2|Page
International Conference on Accounting and Finance
2nd Annual
International Conference on Accounting and Finance
[01]
INTERNATIONAL CONVERGENCE OF ACCOUNTING STANDARDS AND
QUALITY OF FINANCIAL REPORTING
Dr. Paritosh Basu
NMIMS School of Business Management
The NMIMS University, Mumbai. India
ABSTRACT
Emerging countries are continuously vying for their prominence of position within the dynamic global
business ecosystem which is more and more being infested with volatility, uncertainty, complexity,
ambiguity and geo-physical insecurity. Corporate houses there are battling with challenges inter alia
of financial reporting using an internationally acceptable standard. The question is whether it is a
matter of choice or a national cum micro-level business strategy. Possible benefits could be from
bringing in global orientation to business and having better access to developed markets for cheaper
funds. The debate is round the questions whether it will facilitate the process of reflecting appropriate
business value, achieving quantum jump in governance standards and result in total transparency
with critical focus on risks, sensitivity, complex measurements and impact analyses of large one-off
transactions. Their doubt seems to be whether one global financial reporting standard will ultimately
be a reality or not when certain developed nations are still debating. Emerging nations are also
tossing with the idea of either adopting one global standard like IFRS or converging towards it
through the country’s own standard with certain carve outs. One more school of thought is to adopt
dual strategies by adopting the convergence route for the country in general and permitting large
corporations to adopt one standard like IFRS? How far convergence route will deter deriving benefits
from enhanced credibility and comparability of financial statements, global orientation of business,
and easier access to cheaper finance is also being reflected upon. The plenary speech followed by the
panel discussion session will deal with the above issues.
Keywords: Global, Standard, Financial Reporting, Convergence, Adoption
Page | 3
2nd Annual
4|Page
International Conference on Accounting and Finance
2nd Annual
International Conference on Accounting and Finance
ORAL PRESENTATIONS
Page | 5
2nd Annual
6|Page
International Conference on Accounting and Finance
2nd Annual
International Conference on Accounting and Finance
Technical Session 01
Galadari Hotel,
Sustainability
Management both at
Corporate and National
Level with a 4P*
Approach – Impact of
Regulatory Measures
Colombo
Session Chair:
26th May 2015
03.45 p.m.-05.15 p.m.
Bougainvillea,
Dr. Paritosh Basu
01
Agency Costs or Accrual Quality: What Do
Investors Care More About when Valuing a Dual
Class Firm?
Assist. Prof. Jagjit S. Saini
02
Impact of Green Accounting on National Policy
Decisions
Dr. TR. Rajeswari
03
Accounting Analysis of Mining Company in
Indonesia Under the New Indonesian Accounting
Standard and Good Corporate Governance
Regulations for the Financial Performance in
Indonesia Mining Company
Mr. Heykal Mohamed
Page | 7
2nd Annual
8|Page
International Conference on Accounting and Finance
2nd Annual
International Conference on Accounting and Finance
[02]
AGENCY COSTS OR ACCRUAL QUALITY: WHAT DO INVESTORS CARE
MORE ABOUT WHEN VALUING A DUAL CLASS FIRM?
Jagjit S. Saini1, James DeMello1 and Onur Arugaslan1
Western Michigan University1
ABSTRACT
The purpose of this paper is to examine what do investors care about more when valuing a firm’s
stock – the agency costs or the accrual quality. Specifically, we examine the effect of stock ownership
structure on the informativeness and predictability of the earnings as capitalized in stock valuation.
Using a sample of firms issuing multiple classes of stock (hereafter dual class firms) and firms issuing
single class of stock (hereafter single class firms), we measure the effect of firm’s ownership structure
(dual class versus single class) on the earnings response coefficients (ERCs) of prior, current, and
future period earnings. The dual class firms have greater agency cost but higher accrual quality
compared to the single class firms. We find that current annual returns of the firm are negatively
associated with dual class ownership structure and that earnings informativeness and predictability
are decreasing in dual class ownership of the firm as reflected in decreasing ERCs. This indicates
that investors weigh agency costs more than the accrual quality in evaluating the earnings of dual
class firms. This study adds to prior literature on dual class ownership which reports greater agency
costs and better accrual quality at dual class firms in contrast to single class firms. This study also
contributes to the literature on earnings informativeness and predictability by evaluating the effect of
ownership structure on the ERCs of the firm.
Keywords: Earnings response coefficient, dual class firms, single class firms, agency costs, accrual
quality
Page | 9
2nd Annual
International Conference on Accounting and Finance
[03]
IMPACT OF GREEN ACCOUNTING ON NATIONAL POLICY DECIONS
Dr. TR. Rajeswari
Sri Sathya Sai Institute of Higher Learning, Anantapur Campus
ABSTRACT
Currently a society’s well-being is measured by GDP per capita and / or Human Development Index
(HDI). Governments, world over use these data in their policy decisions. However these two indices
ignore the economic worth of the contribution of natural capital and innumerable intangibles to the
well-being of the society. An attempt is made in this paper to study how ‘Green Accounting’ can
provide inputs to measure real economic development of a society. The paper demonstrates with
hypothetical examples how policy decisions at national level can significantly vary if relevant input
regarding natural capital is used/ignored. Further it explains that necessary input can be collected
and presented through ‘Green Accounting’ practices that can enhance the quality of decisions to
build intergenerational well-being. Suggestions to create awareness at individual, social, national
and international level to understand the economic worth of natural capital and its contribution to
economic development and well-being is also presented. The study is exploratory in nature and the
required data has been collected from secondary published sources.
Keywords: Green Accounting, Natural Capital, Intergenerational well being
10 | P a g e
2nd Annual
International Conference on Accounting and Finance
[04]
ACCOUNTING ANALYSIS OF MINING COMPANY IN INDONESIA UNDER THE
NEW INDONESIAN ACCOUNTING STANDARD AND GOOD CORPORATE
GOVERNANCE REGULATIONS FOR THE FINANCIAL PERFORMANCE IN
INDONESIA MINING COMPANY
Mohamad Heykal1, Engelwati Gani1 and Armanto Witjaksono1
Bina Nusantara University, Jakarta Indonesia1
ABSTRACT
The development of the mining industry in Indonesia from the first and until now has been proven in
some areas. The mining industry is one of the pillars of the Indonesia national economy. Mining
activities began with the exploration and exploitation activities are sometimes done for decades in
which, it also results in the mining industry was very different from other industries, including other
capital-intensive industries. This study was qualitative research that conducted at two different
mining activity companies. One is general mining company and the other is coal mining company The
data that collected for this research is the combination between primary data where the researchers
came to the site of the company in Sumatra dan Bangka island and also secondary from the financial
report of the company that come from the Indonesian Stock Exchange . From the research it appears
that Indonesian Accounting Standard Number 33 had been imposed by the mining company entities
and also they implement Standard number 50 and number 55 about financial instrument. In addition,
both companies are also equally imposing number 64 which deals with the exploration and evaluation
of mineral resources. Beside that there are 17 Indonesian accounting standard that also implemented
by that companies. That standard is an implementation of the application of international accounting
standards based on IFRS. IAS 64 as an example of an implementation of IFRS number 6. While in the
corporate governance policies that have been made by the two companies did not have any impact on
the operational performance of mining companies and mineral coal mining in Indonesia.
Keywords: Accounting, mining, financial
Page | 11
2nd Annual
12 | P a g e
International Conference on Accounting and Finance
2nd Annual
International Conference on Accounting and Finance
Technical Session 02
09.00 a.m.-11.00 a.m.
Deregulation of financial
markets and corporate
governance
Anthurium,
Session Chair:
Galadari Hotel,
Prof. P.S.M. Gunaratne
27th May 2015
Colombo
01
Corporate Governance and Dividend Pay-Out Policy: An
Empirical Investigation on Financially Distressed Firms
in Malaysia
Dr. Maran Marimuthu
02
Corporate Social Responsibility Development of Banking
Industry in Hong Kong
Mr. Yam Tsz Kit
03
Long Run Determinants of Equity Foreign Portfolio
Investment (Efpi) in Sri Lanka: A Time Series Analysis
with Autoregressive Distributive Lag (Ardl) Approach
Mr. G.D. Kapila Kumara
04
The Effect of Board Size and Composition on the
Financial Performance of Nigerian Banks
Prof. Muhammad Tanko
Page | 13
2nd Annual
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2nd Annual
International Conference on Accounting and Finance
[05]
CORPORATE GOVERNANCE AND DIVIDEND PAY-OUT POLICY: AN
EMPIRICAL INVESTIGATION ON FINANCIALLY DISTRESSED FIRMS IN
MALAYSIA
Dr. Maran Marimuthu1, Dr. Ravichandran Subramaniam2, Dr. Lai Fong Woon3 and
Assoc Prof. Dr. Lawrence Arokiasamy4
Universiti Teknologi PETRONAS, Malaysia1,3
Monash University, Malaysia2
UCSI University, Malaysia4
ABSTRACT
The primary focus of this paper is to investigate the association between various corporate
governance attributes and dividend pay-out policy and the survival likelihood of distressed firms.
Findings show that distressed companies continue paying dividends despite their dismal performance.
Hence, this paper examines the association of various corporate governance attributes of distressed
firms. It also evaluates what motivates distressed firms to pay out dividends even when their
performance is deteriorating. Data are obtained public listed firms that fall under the PN17
companies using annual reports and financial databases over the period 2008-2014. PN 17
companies are referred as financially distressed companies. Econometrics Methodology is adopted to
deal with both time series and cross-sectional data of about 150 companies. The corporate
governance variables include board composition, board size, CEO duality, outside turnover, block
holder ownership, inside ownership and creditor involvement. The financial variables include current
ratios, financial leverage, total assets/sales, market risk, return on sales, interest coverage and total
assets. “Cox Proportional Hazards” Model will then be used to measure the likelihood of business
failure. This study offers more insights for both academics and decision makers in relation financial
distress and shareholder value maximization.
Keywords: distressed firms, corporate governance, financial performance, dividend pay-out policy
Page | 15
2nd Annual
International Conference on Accounting and Finance
[06]
CORPORATE SOCIAL RESPONSIBILITY DEVELOPMENT OF BANKING
INDUSTRY IN HONG KONG
Yam Tsz Kit
The University of Hong Kong
ABSTRACT
Hong Kong is well known as the global financial center, where most of the multinational financial
corporations run their office in the city. The paper would start with the general situation current
trends of banking sectors in Hong Kong. Then, the definition of corporate social responsibility (CSR)
would be discussed. Afterwards, the recent CSR development in the banking sectors would be
analyzed by the financial budget on CSR, as well as the social impact in a 10 years’ timeframe. The
social impact would show in a more quantitative ways such as the number of volunteer hours
contributed. Information would be mostly based on the annual report of the banks. Then, the analysis
would start to compare the CSR effort based on the scale of the corporation itself. It is expected that
the bigger the business scale, the more resources and thus more mature CSR development on the
company. Other than that, in order to understand more about the cultural differences between the
banking corporations from various origins, the CSR policy divergence of the local banks, Chinesebased banks and foreign-owned banks would be compared with samples. The paper would provide a
clearer understanding of the CSR development in Hong Kong, and shows the degree of impacts
towards the city in trend.
Keywords: CSR, Hong Kong, Banking Industry, Trends, CSR Financial Budget, Social Impact
16 | P a g e
2nd Annual
International Conference on Accounting and Finance
[07]
LONG RUN DETERMINANTS OF EQUITY FOREIGN PORTFOLIO
INVESTMENT (EFPI) IN SRI LANKA: A TIME SERIES ANALYSIS WITH
AUTOREGRESSIVE DISTRIBUTIVE LAG (ARDL) APPROACH
G.D. Kapila Kumara1 and D.A.I Dayaratne2
Department of Economics, University of Colombo, Sri Lanka 1
Department of Accountancy and Finance, Sabaragamuwa University of Sri Lanka 2
ABSTRACT
Equity Foreign Portfolio Investment (EFPI) is useful in many ways to enhance the efficiency and the
liquidity of capital markets. In Sri Lanka, foreign investors are holding 25 per cent of market
capitalization at Colombo Stock Exchange (CSE), the only stock exchange in Sri Lanka, while actively
contributing to the market turnover. Unlike foreign direct investment, EFPI is more vulnerable. The
international fund managers consider many factors in investing on developing countries. Thus, this
study attempts to explore the long-run determinants of EFPI in Sri Lanka using the autoregressive
distributed lagged (ARDL) model covering the monthly time series data from 2004 to 2013. The
analysis is further extended as pre-war and post-war period, by splitting the dataset. The study used
seven explanatory variables suggested by the literatures. A long-run relationship is found only for the
entire period, not for the spitted periods. Accordingly, Market Returns of S&P500, Sri Lanka’s
foreign reserve position measured in Months of Imports, Sri Lanka’s Three-Month Treasury Bill’s
Rates and Exchange Rate-USD/LKR are statistically significant and have long-run positive effect on
EFPI. The rest of the explanatory variables (Market Returns at CSE, London Inter-Bank Offered
Rates, Inflation in Sri Lanka) are statistically insignificant. It was further revealed that there is a
short-run causality running from Three-Month Treasury Bill’s rates and Exchange Rates-USD/LKR
towards EFPI at CSE. These findings would be useful for policy makers and market intermediates to
estimate and forecast EFPI at CSE while contributing to the literature and paves the way for further
studies.
Keywords: Equity Foreign Portfolio Investment (EFPI), Market Capitalization, Colombo Stock
Exchange (CSE), Autoregressive Distributed Lagged (ARDL) Model.
Page | 17
2nd Annual
International Conference on Accounting and Finance
[08]
THE EFFECT OF BOARD SIZE AND COMPOSITION ON THE FINANCIAL
PERFORMANCE OF NIGERIAN BANKS
Muhammad Tanko
School of Management Science.
National Open University of Nigeria, Lagos
ABSTRACT
This paper analyzed the effects of board size and board composition on the performance of Nigerian
banks. The financial statements of nine banks were used as a sample for the period of nine years and
the data collected were analyzed using the multivariate regression analysis. The paper found that
board size has significant negative impact on the performance of banks in Nigeria. This signifies that
an increase in Board size would lead to a decrease in ROE and ROA. On the other hand, board
composition has a significant positive effect on the performance of banks in Nigeria. This signifies
that an increase in Board composition would lead to a decrease in ROE and ROA. It is recommended
that bank's should have adequate board size to the scale and complexity of the organisation’s
operations and be composed in such a way as to ensure diversity of experience without compromising
independence, compatibility, integrity and availability of members to attend meetings. The board size
should not be too large and must be made up of qualified professionals who are conversant with
oversight function. The Board should comprise of a mix of executive and non-executive directors,
headed by a Chairman.
Keywords: Board Size, Board Composition and Nigerian Banks Financial Performance
18 | P a g e
2nd Annual
International Conference on Accounting and Finance
Technical Session 03
27th May 2015
11.00 a.m.-01.00 p.m.
Anthurium,
Galadari Hotel,
Colombo
Enhancement of
Human Rights and
corporate financial
Women Rights
performance
Session Chair:
Session Chair: Ms.
Dr. Paritosh Basu
M.A.D.S.J.S Niriella
and Prof. Jasbir Singh
01
Is Australian Directors’ Remuneration Linked to the
Earning Predictability of the Company?
Mr. Aloysius Harry Mukti
02
Stock Return and Weather: Evidence from Dhaka Stock
Exchange (DSE)
Mr. Mohammad Fahad Noor
03
Tri Variate Analysis to Measure Performance Efficiency
of Indian Private Banking Sector
Assoc. Prof. Mariappan Perumal
04
Cash Flow Patterns: A Predictive Sign of Financial
Distress
Assoc. Prof. Amrizah Kamaluddin
Page | 19
2nd Annual
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2nd Annual
International Conference on Accounting and Finance
[09]
IS AUSTRALIAN DIRECTORS’ REMUNERATION LINKED TO THE EARNING
PREDICTABILITY OF THE COMPANY?
(PRACTICE IN THE AUSTRALIAN STOCK EXCHANGE LISTED)
Aloysius Harry Mukti
Business School, Pelita Harapan University, Tangerang, Indonesia
ABSTRACT
This study examined and answered the research question on whether or not the remuneration of the
members of the Board of Directors (BOD) as a reward for their performance, has a predictive value
to generate future earnings for the company. Based on the 2010 total remuneration package
received by the Board of Directors and the earnings of the firm for the same period, earning
predictability was measured using the Forward Earning Response Coefficient (FERC) model. The
results proved that the Directors’ remuneration evidenced a positive correlation with future company
earnings. Statistical method applying the Multiple Regression Analysis, thru EVIEWS. The positive
accounting theory explains the predictive value of BOD remuneration package on future company
earnings as the result of the maximum efforts exerted by the BOD to generate earnings in ways, both
positive and negative. The latter may imply certain practices, which may be dysfunctional in nature,
but are resorted to in order to benefit and earn revenues for the company.
Keywords: Compensation, Future Earnings Responses Coefficient (FERC), Predictability, Earning
Page | 21
2nd Annual
International Conference on Accounting and Finance
[10]
STOCK RETURN AND WEATHER: EVIDENCE FROM DHAKA STOCK
EXCHANGE (DSE)
Dr. Sarwar Uddin Ahmed1, Mohammad Fahad Noor1 and Dr. Samiul Parvez Ahmed1
School of Business, Independent University, Bangladesh1
ABSTRACT
The relationship between weather and stock market returns has been the subject of extensive
empirical studies, as psychological literature has shown that mood substantially affects judgment, risk
assessment and decision-making, and the influences of weather on mood are well demonstrated.
Various literatures have confirmed an existence of a significant relationship between temperature,
cloud cover and stock returns. On this background, the aim of this paper is to check whether any such
relationship exists by taking the case of Dhaka Stock Exchange. In doing so we have used cloud
coverage and all share price index for the period of 1993-2013. Various parametric and nonparametric tests including F-test, Kruskal-Wallis and Chi-square test have been applied. Mean
returns before and after automation are classified into five level of cloudiness. Results of the
empirical analysis showed that, there is no significant influence of weather on stock prices in Dhaka
Stock Exchange.
Keywords: weather, mood, stock return
22 | P a g e
2nd Annual
International Conference on Accounting and Finance
[11]
TRI VARIATE ANALYSIS TO MEASURE PERFORMANCE EFFICIENCY OF
INDIAN PRIVATE BANKING SECTOR
P. Mariappan1, Dr S. Lakshmi2 and G. Sreeaarthi3
Bishop Heber College – Tamil Nadu, India1,3
Umayal Ramanathan Women’s College, Karaikudi 2
ABSTRACT
The aim of the research work is to investigate and examine the performance efficiency of the Private
Sector Banks of India individually and identify the best performing Bank.
For this study,
researchers collected data on the private sector Bank for the financial years 2004-2013 from the
official websites of individually them considering six input and four output variables. The Data
Envelopment Analysis [DEA] technique has been employed; BCG Matrix [Efficiency with ROI ] and
GE Mckinsey matrix [Efficiency with ROI] for same. Our Study reveals that as per the analysis of
DEA:Development Credit Bank, HDFC Bank and Karur Vysa Bank secures the top position,
according to BCG Matrix: Karur Vysa Bank and South Indian Bank tops the list and as per
McKinsey Matrix: Karur Vysa Bank and Dhanalakshmi Bank are those Banks lies on HM [High
Quadrant]. By merging all the analysis, the researcher identifies that among the private sector
Banks, namely KarurVysa Bank is functioning effectively.
Keywords: DEA, Return on Investment, Efficiency, Private Sector Banks
Page | 23
2nd Annual
International Conference on Accounting and Finance
[12]
CASH FLOW PATTERNS: A PREDICTIVE SIGN OF FINANCIAL DISTRESS
Adriana Shamsudin1, Amrizah Kamaluddin1 and Arun Mohamed1
Faculty of Accountancy, University Technology Mara (UiTM) 1
ABSTRACT
Studies have proven that during distressed situation, information on earnings become less reliable to
measure company’s performance and claimed that the cash flows information are more relevant. A
relatively simple and convenient way to analyse a company’s financial status is to examine the
patterns of cash flow. The cash flow patterns derived from positive and negative signs of its cash flow
components that consist of operating, investing and financing activities. The current study examined
whether the trend of cash flow patterns can predict financial distress incidence within one to three
years before being classified as distressed companies. The data comprised of 124 Malaysian public
listed companies covering the period of 2006 to 2013. The results revealed that one year before
distressed, most of the distressed companies indicated positive cash flow from their operating
activities and increased investments in noncurrent assets. Another common cash flow trend reflected
in the distressed companies was the positive cash flow for both operating and investing activities but
negative cash flow in financing activities. This pattern evidenced that excess cash generated from
operating activities combined with cash obtained from disposal of the noncurrent assets were used to
repay the long term debt and dividend. The results provide an alternative tool to the investors to
predict occurrence of impending financial distress.
Keywords: cash flow, cash flow patterns, financial distressed, operating, investing and financing
activities
24 | P a g e
2nd Annual
International Conference on Accounting and Finance
Technical Session 04
27th March 2015
02.00 p.m.-03.30 p.m.
Economic turmoil’s and
stability of banks and
other financial
institutions
Anthurium,
Galadari Hotel,
Session Chair:
Prof. P.S.M. Gunaratne
Colombo
01
Financial Performance differences between privatelyowned versus state-owned banks: Evidence from
Bangladesh
Mr. Saquib Shahriar
02
Efficiency Comparison between Licensed Commercial
Banks and Licensed Specialised Banks
Ms. E.M.N.N. Ekanayake
03
Microfinance Institutions’ Competition in Northern
Region of Thailand
Assist. Prof. Saleepon Ravipan
Page | 25
2nd Annual
26 | P a g e
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2nd Annual
International Conference on Accounting and Finance
[13]
FINANCIAL PERFORMANCE DIFFERENCES BETWEEN PRIVATELY-OWNED
VERSUS STATE-OWNED BANKS: EVIDENCE FROM BANGLADESH
Saquib Shahriar
Independent University, Bangladesh
ABSTRACT
This paper examines the financial performance difference between privately-owned and state-owned
banks in Bangladesh. The sample size consisted of 20 banks with data from 2007 to 2014 used to
compare between them. Income and balance sheet characteristics and efficiency measures were used
to compare the performances of these banks. The empirical results support the hypotheses that private
banks are more efficient than state-owned banks. We also found that state-owned banks performed
poorly compared to private banks, with lesser profit and also performing poorly on all the financial
performance indicators. In the recent past, the percentage of default rate also increased in the stateowned banks compared to private banks, and it was found that as the extent of state ownership
increases the banks default rate on loans also increased, as such the performance of state-owned
banks deteriorated significantly. Lastly, we found that the asset quality in the state-owned banks
deteriorated drastically in the recent past, resulting in financial distress in the economy.
Keywords: State ownership, private banks, bank performance, Bangladesh
.
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[14]
EFFICIENCY COMPARISON BETWEEN LICENSED COMMERCIAL BANKS
AND LICENSED SPECIALISED BANKS
E.M.N.N. Ekanayake
University of Colombo, Sri Lanka
ABSTRACT
The banking sector in Sri Lanka, which comprises with Licensed Commercial Banks and Licensed
Specialized Banks dominate the country’s financial sector in terms of assets. The main objective of
this study is to determine the efficiency differences in the performance of licensed commercial banks
and licensed specialized banks over the period of 2005-2012. Minitab and SPSS statistical software
have been used in analyzing the data calculated by using ten efficiency ratios for 15 banks.
According to the findings, specialized banks have outperformed commercial banks by performing
better with nine ratios; return on equity, return on assets, employment costs to total assets, noninterest income to total assets, overhead costs to total assets, provisions to total loans, interest margin
to loans and deposits, interest margin to total assets and expenses to income ratio. Commercial banks
are efficient than the specialized banks only in managing their non-performing loans. Therefore it is
evident that the specialized banks have performed more efficiently compared to the commercial banks
in Sri Lanka. The relatively concentrated activities of specialized banks may have facilitated them to
achieve higher efficiencies than commercial banks, which are exposed to higher levels of risks.
Keywords: efficiency, commercial banks, specialized banks
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[15]
MICROFINANCE INSTITUTIONS’ COMPETITION IN NORTHERN REGION OF
THAILAND
Ravipan Saleepon
Srinakarinwirot University
ABSTRACT
The aim of this empirical research is to assess the level of competition appearance in the
Microfinance Institutions (MFIs) in northern region of Thailand after financial crisis in 1997. The
analysis employs a widely used non-structural methodology by Panzar and Rosse. Because actually
every Microfinance Institutions have faced with the dilemma of balance profitability on one hand and
liquidity as well solvency. MFIs ‘competition have affected the profitability and solvency in the same
time. From the study was found that the competitions’ between MFIs in northern region of Thailand
are low competition. This empirical work has attempted to measure the level of competition by H statistics (H) demonstrated that the differences between price (interest revenue) and cost (interest
expenses) likely wider than before 1997. It indicated the more monopoly power of MFIs in northern
region of Thailand.
Keywords: Microfinance Institutions, Competition, Panzar-Rosse
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VIRTUAL PRESENTATIONS
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VIRTUAL PRESENTATIONS
01
The Diffusion of ‘New Public Financial Management
(NPFM) Innovations in Developing Countries: Evidence
from Sri Lanka
Mr. Thusitha Dissanayake
02
The Determinants of Earnings Management: An
Empirical Study of Firms Listed on Hochiminh Stock
Exchange, Vietnam
Hoai Anh Le Thi
03
Factors Affecting to Risk Management Efficiency of
Listed Commercial Banks in Sri Lanka
Ms. S.D.P.Piyananda
04
Corporate Governance, Financial Soundness and
Economic Development: Empirical Evidence from
Malaysia, Indonesia, and Turkey
Wahua, Lawrence
http://financeconference.co/2015/virtual/
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[16]
THE DIFFUSION OF ‘NEW PUBLIC FINANCIAL MANAGEMENT (NPFM)
INNOVATIONS IN DEVELOPING COUNTRIES: EVIDENCE FROM SRI LANKA
Dissanayake Thusitha
School of Accounting, RMIT University
ABSTRACT
In recent years, new forms of accounting techniques and practice have played a central role in the
reform of the public sector. But little is known about the process of which accounting innovation is
diffused throughout public sector organisations. This thesis examines the diffusion of New Public
Financial Management (NPFM) innovation,-across the central-provincial-local level of government
(vertical diffusion) in Sri Lanka.
Based on the Diffusion of Innovation Theory and using triangular approach to data collection arising
from a content analysis of official documentation, semi-structured interviews, and a survey targeting
Chief Financial Officers (CFO) in the public sector, the process of diffusion and adoption of
accounting innovation is reconstructed and the critical success factors and mechanisms explaining
this process are identified.
This study is contributed to existing public sector accounting reforms literature by focussing on the
manner and means of diffusion and by eliciting the views of key actors in the diffusion process
enabling successful adoption in emerging countries. This thesis also provides a clearer understanding
of diffusion process in emerging country, which might be helpful for both policy makers and policy
implementers to attain the expected benefit from the policy.
Keywords: Diffusion, Innovation, New Public Financial Management, Sri Lankan public sector
.
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[17]
FACTORS AFFECTING TO RISK MANAGEMNET EFFICIENCY OF LISTED
COMMECIAL BANKS IN SRI LANKA
S.D.P.Piyananda1 and J.M.R.Fernando1
University of Kelaniya, Sri Lanka1
ABSTRACT
This study aims to identify the most important bank specific and macroeconomic variables that are
affecting to the risk management efficiency of listed commercial banks in Sri Lanka, by studying their
financial statements for the period of 2008 to 2012. Multiple regression analysis and the Correlation
Coefficients (Pearson Correlation) are used as the data analysis tools. Capital Adequacy Ratio (CAR)
is used as the dependent variable to present the risk management efficiency of banks and independent
variables include the credit risk, liquidity risk, Return on Assets (ROA), banks’ size, and operational
efficiency as the bank- specific factors while inflation and GDP growth rate included as the
macroeconomic variables. Findings of this study revealed that liquidity risk, ROA and banks’ size are
the important factors of determining the degree of CAR of commercial banks in Sri Lanka.
Macroeconomic variables do not have huge impact on determination of CAR. Correlation coefficient
shows that there is a significant positive relationship between CAR and each of the independent
variables including liquidity risk, credit risk, ROA and operational efficiency while banks’ size has
significant negative relationship. Further as shown by the results of the study independent variables
combined have relatively high effect on the dependent variable and changes that can occur within, as
the interpretation of the independent variables of the dependent variable reached approximately
82.3%.
Key words: Capital adequacy Ratio, Macroeconomic Variables, Risk Management, Bank-specific
factors, Sri Lankan commercial banks.
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[18]
THE DETERMINANTS OF EARNINGS MANAGEMENT: AN EMPIRICAL STUDY
OF FIRMS LISTED ON HOCHIMINH STOCK EXCHANGE, VIETNAM
Hoai Anh Le Thi
Hue University of Economics
ABSTRACT
Earnings management is the manager’s intervention in accounting information to mislead
stakeholders about the firm’s financial performance or to affect contractual outcomes
depending on earnings figure. This practice is problematic in Vietnam because it is seriously
eroding of users’ trust on the quality of disclosed information. Therefore, the purpose of this
paper is to investigate what factors determine earnings management of listed firms on
hochiminh stock exchange. Base on this study, recommendations will be made to support
users in making right decisions and facilitate regulators, policy makers and standards setters
in setting new policies and standards to curb earnings management. To achieve the aims of
this study, the empirical analysis is conducted by dividing factors into two subgroups:
internal (firm size, CEO duality ) and external (debt covenant contract and audit quality).
The impact of these factors on earnings management is determined by using descriptive
statistics and multiple regression analysis. Earnings management is measured by
discretionary accruals through deangelo’s model. Pilot analysis has revealed that ceo duality
and indebtedness are positively associated with earnings management, whereas firm size and
the choice of big 4 auditors are negatively related to earnings management.
Keywords: Earnings Management, Factors, Hochiminh Stock Exchange, Listed Firms,
Deangelo’s Model
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[19]
CORPORATE GOVERNANCE, FINANCIAL SOUNDNESS AND ECONOMIC
DEVELOPMENT: EMPIRICAL EVIDENCE FROM MALAYSIA, INDONESIA, AND
TURKEY
Wahua, Lawrence
Al-Madinah International University (MEDIU), Malaysia
Abstract
This work investigated the effects of countries’ corporate governance (CCG) and yearlytrend of activities (Year-factor) on Malaysian, Indonesian, and Turkish economic
development, and deposit-taking banks' (DTBs’) financial soundness for the periods 2010 –
2014, after controlling for the impacts of board effectiveness, management efficiency, and
stakeholders’ (Fund-providers, Personnel, Suppliers, and Governments) influence. CCG and
Year-factor were proxied with dummy codes (in line with Univariate and Multivariate GLMs
techniques). Capital adequacy, assets quality, and profitability were proxies of financial
soundness; DTBs’ interest income proxied economic development; performing loans index
proxied board effectiveness; operational efficiency ratio proxied management efficiency;
stakeholders’ financial-benefits/net income ratio proxied stakeholders' influence. IMF’s
country-level aggregate-data were used in quantifying the dependent and control variables,
while SPSS-General Linear Models (GLM) data analysis technique was used. Year-factor
had no statistical significant effect on all the dependent variables, implying that the studied
DTBs had stable operations within 2010-2014. Countries’ corporate governance showed
significant effects on the studied DTBs’ interest income, capital adequacy, assets quality and
profitability when the impacts of board effectiveness, managerial efficiency, and stakeholders
influence were individually, jointly, and severally controlled/not controlled, with the greatest
effects being on assets quality and profitability, followed by interest income, while capital
adequacy came last. Malaysian, Indonesian and Turkish corporate governance showed
highest, higher, and high significant effect on the dependent variables respectively.
Countries’ corporate governance is the key determinant of organisations’ performances; it is
more than firms’ internal corporate governance and includes countries’ values, cultural,
legal, political, economical, social, technological systems, and international-relations.
Keywords: Corporate Governance, Financial Soundness, Economic Development
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