International Journal of Accounting & Finance Review
International Journal of Accounting & Finance Review (IJAFR),Accounting & Finance Review,Accounting, Finance
American Accounting & Finance Society [Affiliated Societies]
FACTORS AFFECTING RISK DISCLOSURE: EVIDENCE FROM A DEVELOPING COUNTRY
Risk disclosure has become an essential mechanism for enhancing transparency, reducing information asymmetry, and strengthening stakeholder confidence in the banking industry. Despite continuous regulatory efforts to improve disclosure practices, limited evidence exists regarding the determinants of risk disclosure in developing economies, particularly Bangladesh. Moreover, previous studies have largely overlooked environmental and social risk disclosures when evaluating overall risk reporting practices. This study investigates the factors affecting the level of risk disclosure among listed commercial banks in Bangladesh. The study employs a balanced panel dataset comprising 30 banks listed on the Dhaka Stock Exchange over the 2019–2021 period, resulting in 90 bank-year observations. A content analysis approach is used to construct a Risk Disclosure Index comprising 60 disclosure items, classified into nine categories: accounting policies; derivatives and hedging; financial instrument risk; operational risk; strategic risk; environmental and social risk; capital structure and adequacy; reserve risk; and compliance risk. Ordinary Least Squares (OLS) panel regression is employed to examine the influence of board composition, ownership structure, and firm-specific characteristics on risk disclosure. The descriptive results indicate that the average risk disclosure score is 74.87%, with a range of 46.67% to 93.33%. The regression model explains 33% of the variation in risk disclosure (R² = 0.33) and is statistically significant (F = 4.40, p < 0.001). The results reveal that board size (β = 0.0519, p < 0.10), board independence (β = 0.3211, p < 0.05), and firm size (β = 0.0708, p < 0.01) are positively associated with risk disclosure. In contrast, sponsor ownership (β = −0.0012, p < 0.10) and leverage (β = −0.0072, p < 0.01) exhibit significant negative associations. In contrast, female board representation, institutional ownership, foreign ownership, and profitability are not significantly associated with the extent of risk disclosure. JEL Classification Codes: G21, M41, G32.
Research Paper/Theoretical Paper/Review Paper/Short Communication Paper
Risk Disclosure, Listed Banks, Ownership Characteristics, Board Composition, Factor
Copyright (c) 2026 Fatema Tuj Johora , Asif Al Saif http://creativecommons.org/licenses/by/4.0
IMPACT OF STRATEGIC MANAGEMENT ACCOUNTING ON FIRM’S FINANCIAL PERFORMANCE: EVIDENCE FROM BANGLADESH’S MANUFACTURING SECTOR
Manufacturing firms in Bangladesh operate in an increasingly competitive and dynamic business environment where effective strategic decision-making is essential for sustaining financial performance. Despite the growing importance of Strategic Management Accounting (SMA), empirical evidence on its adoption and influence on financial performance in the Bangladeshi manufacturing sector remains limited. This study examines the extent of SMA adoption and investigates the relationship between SMA practices and the financial performance of manufacturing companies in Bangladesh. The study employs a quantitative research design based on contingency theory. It uses primary data collected through a structured questionnaire survey of 78 listed manufacturing companies selected through stratified random sampling from the Dhaka Stock Exchange. Data were collected between August and November 2023 and analyzed using multivariate regression and Structural Equation Modelling (SEM). The analysis considers five contingent factors influencing SMA adoption: firm size, company age, ownership participation, accounting staff qualifications, and technology usage. The results reveal that ownership participation (β = 0.421, p < 0.01) and technology usage (β = 0.289, p < 0.01) have significant positive effects on SMA adoption, while accounting staff qualifications show a negative association (β = –0.159, p < 0.10). Firm size (β = 0.117) and company age (β = 0.103) demonstrate positive but statistically insignificant relationships with SMA usage. Furthermore, SEM results indicate that strategic analysis significantly and positively affects financial performance (β = 0.30). The findings suggest that SMA adoption is positively influenced by ownership involvement and technological capability and that greater use of SMA practices contributes to improved financial performance among manufacturing firms in Bangladesh. JEL Classification Codes: M11, M40, M41.
Strategic Management Accounting, Contingent Factors, Financial Performance, Manufacturing Companies, Bangladesh
Copyright (c) 2026 Fahmida Begum , Md. Musfiqur Rahman http://creativecommons.org/licenses/by/4.0
ACCOUNTING INFORMATION TECHNOLOGY AND PERFORMANCE OF LISTED OIL AND GAS COMPANIES IN NIGERIA
The oil and gas industry is the primary generator of government revenue in Nigeria. Still, its extensive activities cause significant environmental damage, leading to widespread environmental devastation and hostile relations with host populations. The key gap in the current regulatory framework notwithstanding, there remains a gaping hole in the stringent accounting and reporting for green accounting, i.e., the systematic accounting of environmental costs and liabilities, in traditional financial reporting. This murkiness creates a risky environment for companies' survival in unstable places like the Niger Delta. This paper examines the relationship between green accounting measures and the financial performance of oil and gas companies listed on the Nigerian stock exchange. The emphasis is on the effects of community development, rehabilitation, and charitable expenditures on net assets and net profit margins. The panel data method was used, and secondary data were collected from 10 listed oil and gas companies for the years 2004-2020, sourced from the Nigerian Stock Exchange Factbook and the companies' annual reports. It was estimated using a fixed-effects model, which was verified by the Hausman test. The analytical toolkit included F-tests, t-tests, and coefficients of determination at the 5 percent significance level. According to the results, the explanatory variables predict 73.8 percent of the variation in net assets (F = 87.33, p = 0.05) and 15.6 percent of the variation in net profit margins (F = 1.16, p = 0.327). The regression analysis indicates that net assets are negatively associated with both community development and rehabilitation costs. Still, donations and charitable contributions have a significant positive impact on net assets (coefficient = 0.399). The results indicate that green accounting practices have a substantial effect on firm wealth, in terms of net assets, but have only a minor impact on profitability, in terms of the net profit margin. Environmental and social cost burdens will decrease asset value in the short run, whereas strategically implemented charitable donations will increase corporate status. The paper proposes formal encouragement of green accounting policy measures to achieve long-term sustainability and transparency in the industry. JEL Classification Codes: M41, Q56, L71, M14, G32.
Green Accounting, Nigeria, Oil and Gas, Community Development, Financial Performance
Copyright (c) 2025 Edwin-Njoku Chizoba Cynthia http://creativecommons.org/licenses/by/4.0
EXAMINING THE LINK BETWEEN ENVIRONMENTAL TAX VOLATILITY AND THE SHIFT TO RENEWABLE ENERGY IN UKRAINE
Environmental taxes are increasingly used as fiscal instruments to internalize environmental externalities and finance renewable energy investments. Environmental taxes are increasingly utilized as fiscal instruments to internalize environmental externalities and finance renewable energy investments. This study examines the nonlinear, regime-dependent relationship between environmental tax volatility and the renewable energy transition in Ukraine, aiming to identify stable tax regimes that effectively support renewable energy development. The study employs annual time-series data from the World Development Indicators covering the period 1980-2023. Preliminary analyses include descriptive statistics, unit root tests (ADF and PP), OLS estimation, and non-linearity diagnostics (BDS and CUSUM tests). Ordinary Least Squares results indicate that a 1% increase in environmental tax revenue increases renewable energy transition by 0.8329% (p < 0.01). Markov switching results identify two distinct regimes. Regime 2 records a higher coefficient (0.7812) and stronger persistence (P22 = 0.970) compared to Regime 1 (0.7016; P11 = 0.909). Regime 2 demonstrates lower volatility, higher mean values (0.9337), and a longer duration of approximately 33 years, indicating a stable and sustained environmental tax regime that effectively supports renewable energy transition. Maintaining stable, consistent environmental tax regimes should be the top priority for policymakers to ensure stable, consistent funding for renewable energy investments, build greater public trust, and accelerate the achievement of SDG 7 in Ukraine. JEL Classification Codes: H2, Q2, Q4.
Environmental Tax, Environmental Energy, Sustainable Development Goals, Markov Switching Model
Copyright (c) 2025 Benjamin Yeboah , Samuel Addo-Paintsil , Mark Yaw Baffoe , Eric Antwi http://creativecommons.org/licenses/by/4.0
RISK-BASED AUDITING IN PRACTICE: A SYSTEMATIC REVIEW OF IMPLEMENTATION AND IMPACT
As companies look to align audit processes with risk exposure rather than solely with compliance, risk-based auditing (RBA) has become increasingly important in contemporary auditing. Nevertheless, despite its theoretical advantages, RBA's actual application remains uneven, and its efficacy varies across industries and audit settings. This study's objective is to methodically investigate the practical application of RBA and assess its quantifiable effects on audit performance using the available empirical data. This study screens peer-reviewed journal papers published between 2010 and 2024 using a systematic literature review process that adheres to PRISMA principles. To evaluate implementation tactics, operational difficulties, and quantitative results about RBA adoption, a total of 23 qualifying papers were examined. The findings show that RBA implementation is rising worldwide, especially among regulated businesses, public bodies, and financial institutions. Improvements in audit effectiveness and operational efficiency are demonstrated by quantitative evidence from the reviewed studies, including quantifiable reductions in audit time reported in 7 studies, increases in risk-prioritization accuracy in 9 studies, and improvements in audit resource-allocation efficiency documented in 6 studies. Compared with conventional audit techniques, several studies also demonstrate improved identification of high-risk audit concerns. The main conclusions show that RBA adoption strengthens audit decision-making, increases assurance quality, and improves alignment between audit operations and organizational risk exposure. However, the data also show that differences in organizational preparedness, audit maturity, and training quality affect performance and implementation outcomes. JEL Classification Codes: M42, M48, G32, C83.
Risk-Based Auditing, Internal Audit, Audit Practices, Audit Challenges, PRISMA, Implementation
Copyright (c) 2025 Ebrahim Mohammed Ahmed , Gurudutta P. Japee http://creativecommons.org/licenses/by/4.0
FORENSIC ACCOUNTING AND CORPORATE SUSTAINABILITY IN BANGLADESHI COMPANIES: AN EMPIRICAL STUDY
Sustainable corporate governance plays a vital role in enhancing transparency, accountability, and long-term organizational performance, particularly in emerging economies such as Bangladesh, where governance vulnerabilities remain persistent. Despite growing recognition of forensic accounting as a tool for strengthening internal controls and reducing financial misconduct, empirical evidence on its influence within Bangladeshi listed companies is limited. This study investigates the impact of forensic accounting on sustainable corporate governance. Data were collected via a structured questionnaire administered to professionals employed by listed companies, yielding 225 valid responses. Sustainable corporate governance was assessed using three core components: the Board of Directors (BOD), Audit Risk Committee (ARC), and Nomination and Remuneration Committee (NRC). Structural Equation Modeling (SEM) was utilized to examine the relationship between forensic accounting practices and sustainable corporate governance. The results reveal that forensic accounting has a significant positive effect on sustainable corporate governance, demonstrated by a path coefficient of 0.090, a standard error of 0.023, a t-value of 3.888, and a significance level of p < 0.01, thereby confirming the proposed hypothesis (H1). The findings indicate that applying forensic accounting enhances sustainable governance structures among Bangladeshi listed companies. Improvements were observed across the BOD, ARC, and NRC indicators, demonstrating that forensic accounting significantly strengthens decision-making processes, reinforces risk oversight, and enhances committee-level governance. Overall, the study provides empirical evidence that forensic accounting plays a measurable role in supporting the key structural components of sustainable corporate governance among Bangladesh's listed firms. JEL Classification Codes: M42, M14, Q56.
Sustainable Corporate Governance, Forensic Accounting, Fraud, Public Listed Companies In Bangladesh
Copyright (c) 2025 Tarun Sen, Md Raihan Ahmed Raju Raju http://creativecommons.org/licenses/by/4.0
INVESTMENT DIVERSIFICATION AND FINANCIAL PERFORMANCE OF COMMERCIAL BANKS IN KENYA: CONTROLLING ROLE OF BANK SIZE
This study examines the connection between diversification of investments and the financial outcomes of commercial banks in Kenya, moderated by Bank size. It addresses critical issues related to portfolio diversification roadmaps within the banking sector, mainly focusing on mitigating various classes of risk. The findings aim to provide insights into best practices for risk management and strategic investment, contributing to a more resilient banking industry in Kenya. The target population for this study includes the 38 commercial banking institutions that held official licenses from the Central Bank of Kenya as of December 2023. The paper employs an analysis of unbalanced secondary panel data, which comprises both time series and cross-sectional data. Data was sourced from the Kenya National Bureau of Statistics, the World Bank, the Central Bank of Kenya, and the published financial statements of all 38 licensed commercial banks in Kenya. The data covers the period from 2013 to 2023. Investment diversification has a significant positive impact on financial performance. The study suggests that an investment portfolio is a key factor in determining the financial performance of commercial banks in Kenya. The findings indicate that diversification of investment portfolios among Kenyan banks encompasses various asset classes, including placements, shares, and government securities, as well as alternative investments, with a notable preference for government securities. Kenyan banks should actively diversify their investment portfolios by including placements, government securities, and shares to enhance their financial performance. By emphasizing the importance of strategic investment choices, particularly in government securities and shares, banks can achieve significant improvements in their overall financial outcomes. JEL Classification Codes: G32, F65, L66, L25, M41.
Investment Diversification; placements; shares; government securities; alternative investments; Dynamic Panel Model; Fixed Effects; Financial Performance
Copyright (c) 2025 Stephen Githaiga Ngware http://creativecommons.org/licenses/by/4.0
BOARD CHARACTERISTICS AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
While global literature has established that board characteristics can influence firm performance, empirical evidence in the context of emerging markets like Nigeria remains inconclusive and often contradictory. This study examines the influence of some specific board characteristics on the financial performance of listed deposit money banks (DMBs) in Nigeria, incorporating audit quality as a control variable. The study is underpinned by the resource dependence theory, owing to the relationship between board characteristics and returns on equity which the study uses to proxy financial performance. Utilizing secondary data from thirteen listed deposit money banks in Nigeria, covering 2014 to 2023, the study employs a robust pooled regression for data analysis. The findings indicate that both board size and board independence exert a significant positive influence on the financial performance of Nigerian deposit money banks. Additionally, audit quality is found to have a significant positive effect on financial performance of deposit money banks in Nigeria. However, gender diversity does not have any effect on the financial performance of these banks. The findings of this study suggest that the ratio of independent directors to the total board size should be enhanced as a policy guideline to be instituted by the Central Bank of Nigeria. The findings also suggest that the regulator should mandate adequate board sizes to be maintained by banks. Furthermore, the findings suggest urging the shareholders to mandate a higher number of independent directors on boards during their annual general meetings. JEL Classification Codes: G21, G34, O16.
Board Characteristics, Financial Performance, Deposit Money Banks, Returns on Equity
Copyright (c) 2025 Akinlolu Adekunle Akinwumi , Lucky Onmonya http://creativecommons.org/licenses/by/4.0
EFFECT OF QUALITY COST ON PROFITABILITY OF LISTED HEALTHCARE MANUFACTURING FIRMS IN NIGERIA
The achievement of operational efficiency and profitability in manufacturing firms depends on proper quality cost management techniques. Quality costs made of prevention costs together with appraisal costs and internal failure costs determine financial performance in organizations. The financial consequences of quality cost elements remain unclear because studies about these elements are rare in the Nigerian healthcare manufacturing industry. Several researchers disagree about how much quality cost management affects profitability, which demonstrates the necessity for additional investigations in this field. The research examines how quality costs affect profitability across the Nigerian healthcare manufacturing companies that are listed on the Nigeria Exchange Group from 2012 to 2021. A correlational research approach served the study through the examination of the entire population, which consisted of all healthcare manufacturing firms listed in Nigeria. The researcher utilized stratified sampling to obtain secondary data from audited annual financial reports published on the Nigerian Exchange Group (NGX) website. STATA Version 13 software conducts multiple regression analysis that depends on panel data. Prevention cost demonstrates a positive relationship to profitability while being statistically significant according to the research results, therefore highlighting that strategic quality management investments lead to superior financial outcomes. Profitability demonstrates no significant association with appraisal cost and internal failure cost. Prevention cost emerges as the key element among all quality cost components for achieving profitability in Nigerian listed healthcare manufacturing firms. The findings presented by this research serve to strengthen knowledge about how strategic quality cost management enhances financial outcomes for Nigerian healthcare manufacturing companies. JEL Classification Codes: M11, M41, L15, L33, O55.
Prevention Cost, Appraisal Cost, Internal Failure Cost, Proactive Quality Management, Return on Assets
Copyright (c) 2025 Lateef Olumide Mustapha , Yahaya Ahmed Onumoh, Abdulrazak Mohammed Aliyu , Jimkuta Daniel Dauda http://creativecommons.org/licenses/by/4.0
EFFECT OF FINANCIAL RISK ON PROFITABILITY OF DEPOSIT MONEY BANKS IN NIGERIA
Financial risks have significantly impacted the profitability of deposit money banks (DMBs), particularly through operational and solvency risks. Traditional operational pitfalls, coupled with challenges in compliance and environmental disturbances, contribute to operational risks that jeopardize the stability of the banking system. Solvency risks pose a threat to the sustainable operation of commercial banks when they are unable to meet their debt obligations. These financial risks lead to a decline in financial performance, as they result in increased costs, reduced revenues, and a loss of stakeholder trust. Addressing these issues is crucial for improving the financial returns of Nigerian DMBs and maintaining strong foundations in their evolving financial sector. This research investigates the impact of financial risks on the profitability of Nigerian-listed deposit money banks. Return on assets is used as the measure of profitability, while operating risk and solvency risk serve as proxies for financial risk. The study employs an ex post facto research design and gathers data from the audited annual financial reports of 11 listed deposit money banks from 2014 to 2023. The results show that operating risk has a positive and statistically significant effect on profitability, highlighting the importance of effective operational risk management. In contrast, solvency risk shows an insignificant effect on profitability. The findings suggest that effective financial risk management is essential for safeguarding profitability and ensuring sustainable operations for Nigerian DMBs within a competitive and turbulent economic environment. JEL Classification Codes: G21, G32, G15, E44, L25.
Financial Risk, Operating Risk, Profitability, Solvency Risk
Copyright (c) 2025 Abdulrazak Mohammed Aliyu, Yahaya Ahmed Onumoh, Nurjahan Akter Monira, Lucky Onmonya, Ayuba Zakka Dangs
DETERMINANTS OF RENTAL INCOME TAX COMPLIANCE AMONG RENT INCOME EARNERS IN GHANA
Rent tax compliance has been a major problem in many developing countries but Ghana's case is worse as successive governments have failed to enhance rent tax compliance. Rental taxation is economically significant, yet a substantial portion of landlords and developers fail to meet their tax obligations. This issue is particularly prevalent in Ghana, where rental income tax compliance remains low despite its potential to contribute significantly to national revenue. This study focuses on identifying the factors influencing compliance, specifically examining the roles of compliance costs, tax rate/structure, tax knowledge and education, and fines and penalties. Utilizing a quantitative research design, data was gathered from 260 rent income earners through questionnaires, out of a targeted sample size of 272. Descriptive statistics and a multiple regression model were employed to analyse the data and identify relationships between the studied variables and rental income tax compliance. The analysis identified a noteworthy positive association between the cost of compliance and tax rate/structure and rental income tax compliance. The results imply that tax compliance costs and the tax rate are significant determinants of rent tax compliance in Ghana. Conversely, tax knowledge and education, as well as fines and penalties, showed an insignificant negative effect on compliance. The study results imply that a proactive approach to reducing compliance costs and enhancing tax structures positively influences compliance among rental income earners. Educational efforts and penalties, however, may require alternative strategies to be effective. JEL Classification Codes: H24, H25, H26, K42.
Rental Income Tax, Tax Compliance, Rent Income Earners, Theory of Planned Behaviour, Ghana
Copyright (c) 2024 Charles Ayariga, Marshall Wellington Blay, Alhassan Musah, Nurjahan Akter Monira
FIRM CHARACTERISTICS AND PROFITABILITY OF LISTED INDUSTRIAL GOODS COMPANIES IN NIGERIA: THE MODERATING EFFECT OF FIRM SIZE
Corporate success is measured by profitability, an important metric, influenced by various factors, including the firm’s size, with multiple effects. The firm’s size, however, as a moderating factor, adds complexity, potentially altering the relationship between firm characteristics and profitability, especially within Nigeria's industrial goods sector. This study examined the impact of firm characteristics and profitability of listed industrial goods companies in Nigeria. As a moderating factor, firm characteristics were represented by liquidity, leverage, and firm age, while the return on assets measured profitability. The study data was collected from ten listed industrial goods firms that had consistently published their audited annual financial reports from 2013 to 2022. The panel-corrected standard error for the random effect model was used to analyze the data. The results show that liquidity has a negative and significant effect on profitability. Conversely, leverage and firm age have a positive and insignificant impact on profitability. In evaluating the moderating effect of firm size, the panel regression results conclude that firm age can reduce profitability. However, the analysis also revealed that liquidity has a positive and insignificant effect on profitability when moderated by firm size while leverage has a negative and insignificant result on profitability. On the other hand, firm size significantly moderates the relationship between firm characteristics and profitability. The findings of this study recommend that younger listed industrial goods firms should not be discouraged by the negative effect of their age on profitability rather they may be profitable as they grow old. JEL Classification Codes: D2, D22, D220.
Firm Size, Liquidity, Leverage, Profitability, Return on Assets.
Copyright (c) 2024 Abraham Momoh Idogho, Celestine Chukwutem Ebogbue, Lucky Onmonya, Yemisi Funmilayo Bosun-Fakunle
REVEALING THE ROLE OF FINANCIAL MANAGEMENT IN THE ANTECEDENT OF AUDIT QUALITY IN THE AUTOMOTIVE SECTOR IN INDONESIA
Audit quality, as an important element to maintain investor trust, is influenced by financial management factors such as financial ratios, intellectual capital, and dividend policy. However, empirical research examining the influence of these factors on audit quality in the Indonesian automotive sector is still limited. This study aims to analyze the relationship between financial ratios, intellectual capital, and dividend policy on audit quality in automotive companies listed on the Indonesia Stock Exchange during the period 2013–2021. Secondary data used include financial information, dividend policy, intellectual capital (measured by the number of employees, level of innovation, and research and development activities), and audit quality based on external auditor assessments. This study uses a quantitative approach with the logistic regression method to test the significant effect of the three variables on audit quality, considering control variables such as company size and operational complexity. The results show that financial ratios, intellectual capital, and dividend policy contribute significantly to audit quality. These findings provide significant implications for investors, capital market authorities, regulators, and company management. For investors, the results of this study can be used as a guide in assessing the audit quality of automotive companies, thus impacting their investment decisions. Meanwhile, for company management, these results are an encouragement to improve the quality of financial reporting. Thus, improvements in corporate governance and oversight mechanisms will contribute to the creation of a more transparent, accountable, integrity-based, and sustainable business environment, which not only improves the company's reputation but also supports the long-term growth of the Indonesian automotive industry in the global market. JEL Classification Codes: C12, G320, M42, N65.
Audit Quality, Financial Management, Financial Ratios, Solvency, Profitability.
Copyright (c) 2024 Etty Indriani, Yenni Khristiana, Ika Swasti Putri, Yosephine Angelina
SUSTAINABILITY REPORTING AND SHAREHOLDERS’ INVESTMENT DECISIONS IN AFRICA
Shareholders’ investment decisions are fraught with several challenges that undermine their optimality and pose detrimental effects to firms on the long run. Sustainability reporting by firms is advanced as a mechanism that drives the efficacy of investors’ decisions. This study investigates the effect of sustainability reporting on shareholders’ investment decisions in Africa. Quantitative research was employed using panel data sourced from the year end reports and financial statements of the sampled firms for a period of 20 years spanning 2004-2023. Descriptive and inferential statistics was deployed to test the collated data and multiple regression was used to estimate the model. The measures of sustainability reporting used are environmental sustainability performance disclosure, social sustainability performance disclosure and governance sustainability disclosure. Shareholders’ investment decisions was proxied by dividend payout ratio and return on equity. Management quality was adopted as a moderating variable. The findings of the study reveal that environmental sustainability performance disclosure and governance sustainability performance disclosure have insignificant positive effect on return on equity, social sustainability performance disclosure has insignificant negative effect while management quality has significant negative effect on return on equity. Environmental Performance Disclosure has insignificant positive effect on dividend payout ratio, social performance disclosure has insignificant negative effect on dividend payout ratio, and governance performance disclosure has significant positive effect while management quality has significant negative effect. The results depict that the measures of sustainability reporting jointly have significant effect on return on equity and dividend payout ratio in models 1 & 2 respectively. The findings demonstrate that sustainability reporting is a significant factor that enhances shareholders’ investment decisions. JEL Classification Codes: G11, Q56, G3.
Dividend Payout Ratio, Environmental Sustainability, Governance Sustainability, Management Quality, Return On Equity, Social Sustainability.
Copyright (c) 2024 Chinanu Emmanuel, Akande Folorunsho, Olabamiji Atanda, Ishola Rufus Akintoye
MODERATING EFFECT OF BOARD INDEPENDENCE ON THE RELATIONSHIP BETWEEN FIRM ATTRIBUTES AND TAX AGGRESSIVENESS: EMPIRICAL EVIDENCE FROM THE NIGERIAN BANKS
Despite increased evidence of the critical role of corporate governance in shaping business behaviour, there is still a lack of understanding of how board independence moderates the relationship between firm qualities and tax aggression, particularly in the context of Nigerian banks. This study examines the moderating effect of board independence on firm attributes and tax aggressiveness relationship in Nigerian banks spanning 2012 to 2022. The firm attribute was proxy as firm size, profitability, leverage, and board independence, while tax aggressive was proxy as the effective tax rate. The data was collected from eleven listed commercial banks in Nigeria. Data analysis were performed using random effects based on the Hausman test. The study concludes that larger banks tend to engage less in tax aggressive strategies than smaller banks. Also, boards with more independent directors tend to be less aggressive in tax activities. In addition, the study concludes that highly leveraged firms have a greater interest in minimising taxes to enhance cash flows available for debt service. Furthermore, when the moderating effect of board independence is introduced, the study concludes that the relationship between profitability and tax aggressiveness was insignificant. Furthermore, larger banks engage in tax aggressiveness when independent directors are involved. More so, the moderating effect of board independent directors will cause a reduction in tax aggressiveness as leverage increases. The study suggest that banks management be encouraged to conduct benchmarking exercises and peer comparisons to assess their tax practices to industry standards. This can help identify outliers and promote a more standardised and responsible approach to tax planning. JEL Classification Codes: M4, M41, M480.
Board Independence, Firm Size, Profitability, Leverage, Tax Aggressiveness.
Copyright (c) 2024 Kolawole Ebire, Anthony Ahmed Musa, Lucky Onmonya
MODERATING EARNINGS MANAGEMENT IN NIGERIA: HARNESSING FREE CASH FLOW, INSTITUTIONAL OWNERSHIP AND AUDIT COMMITTEE INDEPENDENCE
Free cash flow in the Nigerian non-financial firm is related to earnings management (EMT), which has been identified as one of the main culprits leading to catastrophic fraudulent and financial reporting scandals, resulting in huge losses that shareholders can suffer in billions of Naira and dollars. This study examines the Moderating impact of institutional ownership and audit committee independence on the relationship between FCF and EMT of listed non-financial companies in Nigeria. The analysis relies on balanced panel data of seventy-six (76) from 2012 to 2022 and uses purposeful sampling to arrive at a sample of 39. The study's findings suggested that FCF is a resource that triggers managers to engage in EMT. Still, interacting with IWN and ACI has a significant positive impact on EMTs. This implies that the presence of IWN and ACI can reduce the EMT. Thus, the Study recommended that authorities like IFRS, CBN, FRCN, NDIC, SEC, and NSE encourage the manager to invest FCF in projects with net present value. Institutional investors should encourage financial analysts to expose FCF so that investors can make optimal decisions. ACI should use its position to discourage corporate executives from opportunistic behavior. IWN and ACI should monitor the managers to ensure that accounting numbers in the financial statement are correctly calculated and reported in their disclosure. JEL Classification Codes: M1, M4, A1, G3, G4, L2.
Institutional Ownership, Audit Committee Independence, Free Cash Flow, Earnings Management, Transient Shareholders
Copyright (c) 2025 Rabo Ishaku , Nurjahan Akter Monira , Amos Bukar http://creativecommons.org/licenses/by/4.0
TESTING WEAK-FORM EFFICIENCY FOR THE SAUDI PARALLEL MARKET (NOMU)
Market efficiency is essential for a thriving stock exchange and has a substantial impact on capital investments, particularly in emerging markets. This article examines the weak-form efficiency of Nomu, the Saudi Arabian parallel stock exchange. The study employed various statistical tests on the collected closing values of the Nomu index from May 1, 2019, to May 31, 2023. The return normality and stationarity were investigated using the Jarque-Bera, Augmented Dickey-Fuller (ADF), and Phillips-Perron (PP) tests. The Variance Ratio (VR) test was used to assess autocorrelation, while the Wald-Wolfowitz Runs (WWR) test was utilized to examine random walk behavior. While the Runs test indicated some randomness, all other tests rejected their null hypotheses, indicating that the Nomu market is inefficient according to the weak-form model. This inefficiency suggests that historical trading data may predict future prices, which could discourage foreign capital inflows, thereby limiting Nomu's growth and investment appeal. The significance of these findings for regulators and policymakers in formulating market regulations and policies aimed at enhancing Nomu's efficiency and investor appeal cannot be overstated. This paper, with its robust methodology, is believed to be the first to evaluate the Nomu market's weak-form efficiency since its inception, contributing to a better understanding of market dynamics in emerging stock exchanges. JEL Classification Codes: C12, G14, F21.
Emerging Markets, Random Walk Theory, Unit Root Test, Autocorrelation Test, Variance Ratio Test.
AN ANALYSIS OF THE FACTORS AFFECTING THE IMPLEMENTATION OF CAMBODIAN FINANCIAL REPORTING STANDARD FOR NOT-FOR-PROFIT ENTITIES
The adoption of the Cambodia Financial Reporting Standard (CFRS) for Not-For-Profit Entities (NFPEs) is crucial for both the entities themselves and the Accounting and Auditing Regulator (ACAR). Despite the large number of registered not-for-profit entities in Cambodia, not all of them have embraced the use of CFRS. This study aims to analyze the factors that influence the likelihood of adopting CFRS for NFPEs through a logit regression model. Six factors are identified, including three observed variables (entity size, fear of penalties, and ease of accessing funds) and three latent variables (valuation of accounting items, entities' readiness, and consistency with tax regulations). Data was collected from 109 entities. The empirical findings reveal that five out of the six factors are statistically significant in explaining the likelihood of entities adopting CFRS for NFPEs. However, the entities' readiness to adopt CFRS was found to be statistically insignificant. The estimated parameter values for the significant factors align with expectations. The Pseudo-R2 suggests that approximately 61.8 percent of the variation in the dependent variable can be attributed to the independent variables. It is important for not-for-profit entities and the ACAR to consider these significant factors when promoting the adoption of CFRS for NFPEs. Future research could further investigate the reasons behind the lack of significance in the entities' readiness factor and explore additional factors that may influence the likelihood of CFRS adoption. JEL Classification Codes: M10, M40, M41, M48.
Cambodian Financial Reporting Standard for Not-For-Profit-Entities, Logit Regression Model, Exploratory Factor Analysis, Maximum Likelihood Estimation.
Copyright (c) 2023 Siphat Lim, Edman Padilla Flores
THE IMPACTS OF CHARACTERISTICS OF HOMETOWN CONNECTEDNESS BETWEEN AUDITORS AND EXECUTIVES ON AUDIT QUALITY: EVIDENCE FROM CHINA
Quality audit depends on the qualified audit team. Hometown connectedness affects audit quality among executives and auditors. Higher auditor-executive hometown connectivity degrades audit quality more. The present study aimed to analyse and test the influence of the strength and density of auditors-managers hometown connectedness on audit quality. Panel data research methods were employed here. The data is analyzed using the Regression model, including the Logit regression model and OLS regression model, Pearson correlation coefficients, χ2 grouping test and Heckman two-step regression, by using 3674 observations of the Chinese Stock markets from 2008 to 2020 and from the perspective of sociology and economics that were reserved over 15 different industries and the auditor-manager hometown connectivity involved 25 different provinces. The present study reveals that the auditors-manager's hometown connectedness has a negative effect on audit quality. The influence degree increases along with the strength of the auditors-manager's hometown connectedness. Secondly, the influence degree increases along with the density of auditors-managers hometown connectedness. Finally, some suggestions related to audit quality supervision are put forward. The above findings are still valid after controlling for potential endogenous problems. The research on the relationship between auditors-managers' hometown connectedness and audit quality is extended and deepened. The present study's findings apply to auditors and executives in that a bias-free relationship is essential to carry out an influence-free audit process. Audit organizations and business organizations can benefit from this research. JEL Classification Codes: D73, F65, G32, H54, L32, M41.
Hometown Connectedness, Strength of Relationship, Density of Relationship, Audit Quality
Copyright (c) 2023 Deli Yuan, Md. Abu Issa Gazi, Guangrui Liu Liu, Xiaolin Chen Chen, Mohammad Nurul Alam
ROLE OF INTERNAL AUDITORS AND SUSTAINABILITY REPORTING: MEDIATING EFFECTS OF AUDIT COMMITTEE PERFORMANCE
This study examines the relationship between the role of internal auditors and practices of sustainability reporting in the organization. Moreover, this study also examined the mediating relationship between the audit committee’s performance in relation to the role of internal auditors and practices of sustainability reporting. To fulfill this objective, data collection (325 responses) has been done from financial institutions of Bangladesh, which covers 85% of the total population. Standards of International Professional Practice Framework suggest two important roles of internal auditors, assurance and consulting, which are considered exogenous constructs in this study. The direct and indirect effects of exogenous and endogenous constructs are determined by using SmartPLS-4. The Results revealed that internal auditors' assurance and consulting roles have a positive and statistically significant relationship with the practice of sustainability reporting. Moreover, the results also reported that audit committee performance has also mediating relationship in both two roles of internal auditors and sustainability reporting. The result of this study support to influence the understanding level of policy maker, regulators, and different stakeholders about the role of internal auditors and audit committee in relation to the practice of sustainability reporting of a financial institution in the perspective of developing countries. JEL Classification Codes: M40, M41, M42, H83, F65.
Role of Internal Auditors, Audit Committee, Sustainability Reporting.
Copyright (c) 2023 Md Gulam Sharoar Hossain Khan
IMPACT OF SOCIAL RESPONSIBILITY DISCLOSURE ON THE INTEGRATION OF GREEN ACCOUNTING AND CORPORATE GOVERNANCE ON HIGHLY POLLUTED INDUSTRIES IN INDIA
Fulfilment of environmental and social obligations is required for sustainable development. Green accounting integrates all environmental consequences into corporate accounting accounts. Disclosure of Corporate social responsibility is a component of accounting performance tied to the social, economic, and environmental aspects of a company's programme that can be vital in cultivating stakeholders. The current research aims to investigate the effect of social responsibility disclosure on integrating green accounting and corporate governance of highly polluting industries in India. The study employed a descriptive study design and qualitative research methods in accordance with the interpretative research philosophy and collected the sample data from 52 highly polluted industries from Central Pollution Board in India. The study employs a structural model, descriptive statistics, and F-test analysis. The result reveals that green accounting and firm characteristics significantly enhance the selected firms' social responsibility disclosure. Furthermore, it was discovered that corporate governance and social responsibility disclosure impact the chosen firms' performance and value. However, it has been determined that green accounting does not affect the profitability or market value of the selected firms. Also, this work concludes that a good firm gives its surroundings and surrounding community enough consideration in addition to its pursuit of profit. As the research is based on 52 industries, the generalized result can not bed determined. The knowledge of the respondent also impacts the research. JEL Classification Codes: M49, M14, G30, Q56.
Green Accounting, Corporate Governance, Corporate Social Responsibility, Environmental Sustainability.
Copyright (c) 2023 Jyoti Tanwar, NVM Rao
INTERNATIONALIZATION AND FINANCIAL STABILITY OF DEPOSIT MONEY BANKS IN NIGERIA
This study aims to examine the effect of internationalization on the financial stability of deposit money banks in Nigeria. The study is crucial, as financial stability is significant in the effective functioning of all other sectors of the Nigerian economy. The data for the study were extracted from the financial statements of the deposit money banks listed on the Nigerian Exchange Group as of 2ist December 2021. The validity and reliability of data were premised on their certification financial statements by statutory auditors. Descriptive and panel data analysis were employed for the data analysis. The findings demonstrate that foreign assets to total assets and foreign taxes to total taxes have insignificant effects, while foreign profits and total profits and cross-border banking activities have significant effects. However, the joint statistics further reveal that internationalization has a positive effect on the financial stability of deposit money banks in Nigeria. The result suggests that managers at the foreign operations of the banks should review operational strategies to ensure adequate support and improve foreign banking operations performance towards contributing to the financial stability of the banks. JEL Classification Codes: G50, P45, F23, B17.
Financial Stability, Foreign Assets to Total Assets, Foreign Profits to Total Profits, Internationalization, Offshore Banking.
Copyright (c) 2023 Egbule Chukwuka, Rufus Ishola Akintoye, Theophilus Anaekenwa Aguguom
IMPACT OF FINANCIAL LITERACY ON INVESTORS: A SYSTEMATIC LITERATURE REVIEW USING PRISMA PROTOCOL
Financial literacy is the potential to understand and productively use different financial skills such as managing finance, budgeting and investing. FL has been considered one of the most important factors to improve the growth of investors and the economy as a whole. This study’s main purpose is to present a Systematic Literature Review (SLR) on FL and Investment between 2012 and 2021. The Systematic Literature Review analysis has been performed based on the PRISMA to analyse 26 related articles obtained from the Web of Science, Taylor and Francis and Jstor database. The review of the paper has been categorised based on publication year, a journal list, publication by authors number, features of review articles, tools and techniques applied, variables, findings and practical implications and outcomes of the area of study. The outcomes of this paper provide an understanding of the publication criteria of financial literacy and investment along with that it also offers possible approaches for further publications. The findings of the study also analyse the impact of financial literacy on investors. The study will provide an in-depth understanding of the concepts of Financial Literacy. The study suggests that future researchers initiate further research on financial literacy and investment and also diversify the broader study period. This paper is the first of its kind to identify the impact of investment preference on investors. JEL Classification Codes: G50, G51, G52, G53.
Financial Literacy, Investment, Investors, PRISMA, Systematic Literature Review, Financial Management.
Copyright (c) 2023 Ritika Maurya, Anu Mohta, V Shunmugasundaram
BEHAVIORAL FACTORS INFLUENCING INVESTMENT DECISIONS: A SYSTEMATIC REVIEW USING PRISMA
The purpose of this systematic review is to analyze the previous study made in the past related to an association between behavioral biases and investment decisions. This systematic review article identified 21 distinct biases affecting the investment decisions made by investors. Data were collected from 3 databases (Scopus, Taylor and Francis, and Web of Science) using PRISMA guidelines. The inclusion criteria for this systematic review were (i) publication date 2012 to 2022 (ii) published in the English language (iii) open access articles (iv) all types of documents except review articles etc. The findings of the study support that there is a significant relationship between 21 distinct behavioral biases and investment decisions. The study found there is a lack of female participants to male participants. There is a sampling bias found in many studies i.e., the studies employed non-probability techniques to collect samples. This study extends the current knowledge about the previous study being researched related to an association between behavioral biases and investment decisions. This systematic review provides a clear picture of the gaps in the previous literature. This study is helpful for researchers and academicians in understanding the biases investors undergo while making investment decisions and addressing the gaps identified related to different types of behavioral biases and areas of study that need to be explored more in near future. JEL Classification Codes: D91, G10, G4, G11, G41.
Behavioral Biases, Behavioral Factors, Investment Decisions, Behavioral Finance, Cognitive Biases.
Copyright (c) 2023 Aashna Sinha, V Shunmugasundaram
INVESTMENT BEHAVIOR OF CORPORATE PROFESSIONALS TOWARDS MUTUAL FUNDS IN INDIA
Investors today have access to a wide variety of investment opportunities thanks to the increasingly competitive nature of the market. Mutual funds, out of the many other investment options available, are the one that are best suited for the average person since they provide the ability to invest in a portfolio that is both diversified and managed by professionals at a fee that is relatively modest. A mutual fund is a type of investment instrument that allows investors to pool their capital for the purpose of purchasing a diverse portfolio of securities. The present research study aims to understand the investment behavior of corporate professionals and also to study the various factors which influence the investment behavior of corporate professionals towards mutual funds. The research study is based on the primary data gathered from 175 different respondents through the use of a structured questionnaire. Convenience sampling, a non-probability sampling was used to identify respondents for the research study. Exploratory Factor Analysis, often known as EFA, was used to identify various factors that influence the investment behavior of corporate professionals with regard to mutual fund investments. The present research study stood effective in elucidating seven significant factors that influence the investment behavior of corporate professionals with regard to mutual fund investments. JEL Classification Codes: E30, E44, E62, D14.
Investment Behavior, Mutual Funds, Exploratory Factor Analysis.
Copyright (c) 2023 Kunal Gaurav, Aishwarya Suraj Ray, Aditya Pradhan
MEASURING AWARENESS ABOUT MUTUAL FUNDS: A STUDY ON BANK EMPLOYEES IN TRIPURA
This paper aims to find out bank employees' awareness level towards mutual funds and their impact on investment in the mutual fund. The study was conducted using a simple random sampling design of 262 employees working in different banks in Tripura, India. The size of the population was 815 employees. The data was collected using a structured questionnaire. Ordinal logistic regression analysis and chi-square test were used to assess the impact of employees' awareness on investment in mutual funds. It was found that the overall level of awareness of bank employees in Tripura towards mutual funds was high, and the level of awareness and volume of investment in the mutual fund are directly related. We conducted a preliminary evaluation study on the awareness level of mutual funds of bank employees using ten multiple questions having one option correct. This study will provide a complete informative summary to the policymaker, bank employees, and non-bank employees to make decisions for investment. It will help to take all necessary steps to spread updated awareness about mutual funds among investors. The study consists of several vital inputs which will be useful to the academician to go for further study in detail. Further research may be done in this field by taking another variable factor that needs to be considered to measure the employees' awareness level. JEL Classification Codes: G11, G14, G24, G38, N25.
Bank Employees, Awareness Level, Investment Behavior, Mutual Fund Investment.
Copyright (c) 2023 Sujit Deb, Ranjit Singh, Lata kumari Pandey, Vibha Yadav, Sankha Subhra Deb
WHAT CAUSES NON-PERFORMING LOANS? EVIDENCE FROM THE ISLAMIC BANKING SECTOR OF BANGLADESH
This study aims to investigate the impact of bank-specific and macroeconomic factors on non-performing loans (NPLs), also known as irregular loans, in Islamic banks in Bangladesh. The study is crucial, as the NPL has become a growing concern for Bangladesh's banking sector, which is affecting the country's economy. The data of banks specific factors were collected from the annual reports of the sample. In contrast, macroeconomic factors were gathered from the World Development Indicators covering the period from 2007 to 2018. Different diagnostic tests, including correlations, heteroskedasticity, and VIF (Variance Inflation Factor), were run to confirm that the results from OLS are accurate and reliable. The study further runs fixed effect and random effect models to check the robustness of the findings. The findings indicate that bank-specific factors such as loan growth, loan-to-asset ratio, and net interest margin significantly reduce NPLs. Moreover, macroeconomic factors like GDP growth and inflation significantly influence NPLs under all models. While we divide the samples into some sub-samples, we found almost similar results, confirming the robustness of the findings. The findings suggest banks' management, regulatory bodies, and other stakeholders have necessary initiatives on how to reduce the NPLs. JEL Classification Codes: F65, G21, G32, H81.
Bank-Specific Determinants, Islamic Banks, Macroeconomic Variables, Non-Performing Loans.
Copyright (c) 2023 Md. Asad Iqbal Chowdhury, Mohammad Shamsu Uddin, Habib Ullah, Monir Ahmmed, Md Jafar Shadek
INFLUENCE OF MACROECONOMIC VARIABLES ON EXCHANGE RATE: A STUDY ON BANGLADESH
Exchange rate plays an imperative role in international trade of the country. The exchange rate is an important macroeconomic variable used as parameter for determining international competitiveness and indicates the global position of economy of the country. The development of the country is closely related with its foreign exchange system. The construction of this study is to determine the influential macroeconomic variables of the exchange rate by considering 20 years, from 2002 to 2021, data of Bangladesh. Pearson’s correlation and multiple linear regression are used to analyse the data. The results indicate that current account balance, foreign exchange reserve, remittances, and GDP growth rate has a significant positive correlation with the exchange rate. However, interest rate and current account balance have no statistically significant relationship with the exchange rate. Therefore, current account balance, foreign exchange reserve, remittances, and GDP growth rate are the most influential factors in determining the exchange rate. Therefore, this research concludes that policymakers can change these influential factors to get the best exchange rate for the benefit of the growing economy of Bangladesh. JEL Classification Codes: B22, O24.
Exchange Rate, Bangladesh, GDP, FDI, Remittance, Foreign Exchange Reserve, Macroeconomic Factors.
Copyright (c) 2023 Shaikh Masrick Hasan, Roushanara Islam
TESTING WEAK FORM OF EFFICIENT MARKET HYPOTHESIS ON SOCIALLY RESPONSIBLE INDICES: COMPARATIVE STUDY BETWEEN DEVELOPED AND EMERGING MARKETS
The study attempts to identify the presence of randomness in the socially responsible indices (SRI) of the stock markets of developed and emerging economies. 9 developed and 5 emerging economies were considered for the test of randomness on daily, weekly, monthly, quarterly and semiannual return of socially responsible and their benchmark indices. The Shapiro-Wilk test is used to test the data's normality, whereas the runs test and Augmented Dickey-Fuller test are used to find the randomness of the data. It has been observed that the market could be more efficient and random for all time durations. Most of the non-randomness is seen in daily and weekly returns. However, inefficiency disappears as the time frame increases. The combination of runs and ADF tests show that South Africa, Singapore, and South Korea show randomness for all time durations, whereas the same randomness pattern for Brazil, Australia, Japan, Singapore, and South Korea. Arab, Austria, Germany, Nordic, and USA are not present in daily return and randomness for all other durations for both the test combinations. India and Egypt show non-randomness in daily and weekly returns and randomness for all other durations under the first test combination. It is also observed that most socially responsible investment indices resonate with the randomness patterns of benchmark indices. Socially responsible investors such as pension funds may find the article resourceful in identifying socially responsible investment destinations and diversifying their portfolios. JEL Classification Codes: G32, F65, L66, L25, M41.
Weak Form of Efficient Market, Socially Responsible Indices, Developed And Emerging Markets.
Copyright (c) 2022 Sabyasachi Mondal, Ranjit Singh, Vibha Yadav
FINANCIAL CRISES AS A THREAT TO CORPORATE SUSTAINABILITY: EVALUATING THE IMPLICATIONS OF ASSET DEVALUATION AND DEBT DEFLATION IN THE PURSUIT OF SUSTAINABLE DEVELOPMENT
In the past few years, economic efforts and policies of nations and businesses have been geared towards achieving sustainability. However, the general price level and other economic factors have not been so favorable for businesses over these years, especially in recent times, thus raising many questions in the area of sustainability of operations. Consequently, we examined the extent to which financial crises (measured by asset devaluation and debt deflation) threaten corporate survival using the case of selected Nigerian manufacturing companies. This descriptive study's population was 83 operations staff of selected manufacturing firms. Data for the study were gathered from 69 respondents who formed the study's sample. Pearson Product Moment Correlation was used as the procedure for data analyses, and evidence showed that asset devaluation and debt deflation significantly threaten firm liquidity and re-investment capabilities of manufacturing firms. This paper, thus, concluded that financial crises pose a significant threat to corporate sustainability. As a way forward, corporate organizations, especially those in the manufacturing business, should endeavor to maintain moderate capital and debt ratio while striving for survival to avoid the threats to liquidity and earnings re-investments; at the same time, national and state governments are encouraged to urgently institute measures to cushion the business effects of the financial crises as a further move to sustainable development. JEL Classification Codes: G01, Q01, G12, F31, F41.
Asset Devaluation, Debt Deflation, Liquidity.
Copyright (c) 2022 Happiness Chibuzor Goodluck, Rachael Okwudili Iliemena, Md. Mohidul Islam