September 2017 (Global Review of Accounting and Finance)

September 2017 (Global Review of Accounting and Finance)

Total Articles - 7

Pages 1 – 19

Author: Weli and Julianti Sjarief

The internal control system is important in the governance of enterprise. An effective internal control system involves the entire personnel of the company, including accounting procedures. The aim of this study is to analyze the relationship between company characteristics, quality of corporate governance and the extent of company disclosure of internal controls over their financial reporting. Given information about the company's internal controls need to be known by all stakeholders. Therefore transparency in the presentation of information is very important. The results of a survey of 140 companies listed on the stock exchanges show that Indonesian companies disclosure was limited to the minimum that needs to be disclosed so that the company's internal control conditions are not presented in detail in the financial statements. This indicates that the awareness of companies to disclose their internal control conditions is still low. Besides, this study tested several characteristics of the company and corporate governance mechanisms which are supposed to influence the internal control disclosure in their financial statements. The result gave strong support to the size of the company, the cost of the audit, the audit committee size and proportion of management ownership.

Pages 20 – 38

Author: Mohd I M Alnajjar

The purpose of this study is to investigate the impact of accounting managers’ knowledge and top management support on accounting information systems and, moreover, to analyze the impact of accounting information systems on performance management and organizational performance. This study analyses the data collected from 74 SMEs related to the trading, services and manufacturing sectors. SPSS and AMOS are used for doing regression analysis; specifically structural equation modeling is applied for data analysis. Based on the results this study concludes that accounting managers’ knowledge and top management support significantly impact on the accounting information systems in an organization and, consequently, accounting information systems also significantly impact the performance management and organizational performance of that organization. By using accounting information systems, decision makers obtain useful information and use it in decision-making and strategy building to achieve organizational goals and objectives, which should increase the company’s performance.

Pages 39 – 50

Author: Raj Varma

This paper examines the role of organization form on the real investment decisions of a firm. Using detailed project-level data on hundreds of projects, this paper investigates risk and returns of projects in the movie industry characterized by two distinct and separate organization forms: one by firms that cater to the needs of consumers in small specialized niches and the other by firms that cater to the mass market. The findings are consistent with theories in which firms with organization forms plagued by agency problems engage in distorted investment behavior.

Pages 51 – 61

Author: Dalal Aloumi and Sulaiman Al-Jassar

The study focused upon comparing the performance of both conventional and Islamic banks before and after the financial crises, which took place in 2008. Through the empirical analysis of a panel data collected from 8 listed banks in Kuwait, during 2005 – 2015; the performance and profitability of Kuwait banks were assessed and the impact of the financial crisis during this period is also depicted. The study suggests the fixed effect model is an appropriate model to model both return on assets (ROA) and return on equity (ROE) as measures of performance. Moreover, the type of bank (whether conventional or Islamic) has no significant effect on bank performance as defined in this study. The Financial crises indicator has significant effect on ROA but not on the ROE.

Pages 62 – 82

Author: Nahin Israt Shamsi and Tasrin Farjana

The main motives of this research are to measure the impact of financial leverage (total debt, long-term debt and short-term debt) on firm performance and to assess whether firm size affects the leverage –performance relationship and how this relationship is varied from industry to industry. This study is conducted using a panel data on 24 non-financial companies of CSE50 index, listed in Chittagong Stock Exchange over the duration of 2005 to 2014. The authors have used proxy of Return on Asset, Return on Sales and Net profit margin to measure firm performance and Debt to Asset, Long-term debt to Asset and Short-term debt to Asset to measure financial leverage. Some other control variables (e.g. Size, age, tangibility, GDP growth rate, dummy variable etc.) which are expected to have major influence on firm’s performance have also been considered by the authors. Fixed effect method is used to conduct various estimations of this study. Empirical results of this paper reveal that financial leverage has significant (at 10% significance level) negative impact on firm’s performance, this result is consistent in case of both short-term and long-term leverage and in case of manufacturing firms, this impact is significant but it is insignificant for service oriented firms.

Pages 83 – 99

Author: Mohammad Nayeem Abdullah

The article examines the impact of six factors, i.e., company market value; investment decision; finance decision; signal theory; agency theory; and shareholder structure on dividend policy of a company. 57 companies have been approached among which 55 responded and filled out the questionnaires, out of which two were deemed unusable. The questionnaire was designed to identify the importance of six different factors that the management considers while setting the dividend policy of the company. The analysis highlighted the importance according to the economic sector as well. 18 questions were asked which focused on company value, investment decision, financing decision, signalling theory, agency theory, and shareholder’s structure. Rotating Factor analysis is used for getting the rank order of the generated factors. The study has identified that company value is the most important factor, followed closely by shareholder’s structure when confirming the dividend policy of the firm. The rest of the factors in order of importance are signalling theory, investment decision, finance decision, and agency theory. The financial position and future cash need of the Board of Directors and their wealth have a significant role in dividend decision-making. In Bangladesh, pay out culture is dominated by a particular majority shareholder’s group interest. Questionnaire is used to analyse the dividend policy factors in a developing country setting, which can be applied to assess the performance of markets across multiple developing countries.

Pages 100 – 113

Author: Sakib Bin Amin and Lamia Lazmi Khandker

Researchers have always been concerned about the key determinates of economic growth. However, to the best of our knowledge, very little attention has been paid to empirically examine the relationship between economic growth, exports and external debt servicing in Bangladesh economy. This paper tries to investigate the impact of export and external debt on the economic growth of Bangladesh. The annual data series over the period 1980-2014 has been used in this paper. The authors performed the Augmented Dickey Fuller (ADF) test to check if the variables are stationary, either at their level or at first differences. The study used the ARDL (Auto- Regressive Distributive Lag model) model to check if export and external debt are co-integrated with economic growth of Bangladesh. According to the findings, export and external debt, both are co-integrated with Economic Growth for lag 2, 3 and 4. Finally, authors applied the Granger causality test and results revealed that export and economic growth has strong affects each other- both in short run and long run. However, impact of External Debt on Economic Growth prevails only in long run; no short run causality was found. Moreover

Total Articles- 7

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