Open Access Original Research Article

Accounting Rules on Loan Losses and Security Gains Contribute to Earnings Management for the Banking Industry in Sri Lanka

G. K. Suren W. de Chickera, Liu Qi

South Asian Journal of Social Studies and Economics, Page 1-16
DOI: 10.9734/sajsse/2019/v3i330104

One of the most serious concerns presently facing the accounting profession is the growing complexity, extension, and significance of issues adjoining fair value measurements. Many researchers and practitioners criticized the fair value accounting and blame for it causing economic failure. This paper studies licensed commercial banks and the financial institution listed under the Colombo stock exchange to examine the association between fair value accounting and earnings management. In this research, we are examining the provisions for loan loss and discretionary security gains and losses by introducing the fair value assets and liabilities. We used the statistical methodology followed by Beatty et al. (2002) to test the banks reported fair value assets and liabilities associated with provisions for loan loss. We test several robustness tests and sensitivity analysis for our research design. We use both the current year and one-year ahead data test the provision for loan loss, discretionary security gains, and losses after controlling bank-specific features. We found evidence that; banks reported fair value assets and liabilities are positively associate with provision for loan loss. We found the evidence that the level 2 fair value assets and liabilities are a predominant determination for the association between provisions for loan loss. Our evidence is consistent with past research and persuades us that banks use fair value measurements to manage the earnings.

Open Access Original Research Article

IFRS Adoption and Bank Performance in Nigeria and Canada Banks

T. Ajibade, Ayodeji, Nyikyaa, Terdoo Phoebe, Nyikyaa, Nguavese Miriam

South Asian Journal of Social Studies and Economics, Page 1-8
DOI: 10.9734/sajsse/2019/v3i330105

The aim of this study is to examine the effect of adopted International Financial Reporting Standards (IFRS) adoption on the financial performance of banks in Nigeria and Canada. The study made use of cross sectional data obtained for a period of 10 years from 2006 to 2017, while the regression analysis was used to examine the impact of IFRS adoption on the earnings of 5 banks in Nigeria and Canada. The study found a significant and positive relationship between IFRS adoption and the banks in Nigeria and Canada. The study concludes that IFRS adoption has improved the decision making capability of the various stakeholders, thus, increasing investor confidence. The study suggests that, in order to safeguard the suitable adoption of IFRS in Nigeria and Canada, competent Accountants and Auditors in IFRS are required in large number and that the Institute of Chartered Accountants of Nigeria and Canada must intensify it efforts in organizing IFRS based training programs for its members and other parties connected with corporate reporting.

Open Access Original Research Article

International Financial Reporting Standard (IFRS) Adoption and Economic Growth: A Study of Nigeria and Kenya

Ajibade, Ayodeji Temitope, Okeke, Obiajulu Chibuzo, Olurin, Oluwatoyosi Tolulope

South Asian Journal of Social Studies and Economics, Page 1-8
DOI: 10.9734/sajsse/2019/v3i330106

This study examines the effect of IFRS adoption on economic growth, using Nigeria and Kenya, for the period 2000-2016. The data which was utilized in this study, was gotten from National bureau of statistics. Descriptive statistics and paired sample t-test were used to analyze the data. Manufacturing sector Gross domestic product (GDP) was used to proxy Economic growth. However, the findings show that there is a significant difference in Economic growth of Nigeria and Kenya between pre and post IFRS adoption. Hence, the study recommends that government should ensure the fully adoption and implementation of IFRS in every possible sector in other to enjoy other benefits that accrue from it. Also, further studies on IFRS adoption and economic growth should employ other variables not used in the study.

Open Access Original Research Article

Analysis of Strategic Variables for Ecotourism Development; an Application of Micmac

Nafiah Ariyani, Akhmad Fauzi

South Asian Journal of Social Studies and Economics, Page 1-12
DOI: 10.9734/sajsse/2019/v3i330107

This study aims to determine strategic factors and its relationship in developing ecotourism areas. This research uses prospective structural approach. The analytical method uses Micmac to identify the most influential variables and its relation to Kedung Ombo ecotourism development. The results of analysis which realize the typology of strategic variables based on the strength of influence found 6 classifications of variable, namely: 1. The dominant variable consists of: regulation, and governance; 2. Key variable (Relay variable) consists of: institutional coordination, apparatus role, tourism marketing and tourism promotions. 3. Autonomous variable consists of: natural beauty, accessibility, potential of market tourism, local awareness of tourism. 4. The output variable consists of: funds for community, preservation of local wisdom, preservation of forest sustainability, conservation of reservoir function. 5. Regulators variable consists of: special permit policy for investment, retribution policy, tax policy, allowance policy, tourist attractions. 6. Secondary variable consists of: availability of tourism infrastructure, tourist interest of ecotourism, involvement of local community. The results of this study show a variety of information sources for policy makers in Kedung Ombo ecotourism development in a sustainable manner.

Open Access Review Article

Dividend Policy and Financial Performance- A Study of Quoted Manufacturing Firms in Nigeria and Kenya

Ayodeji Temitope Ajibade, Motunronke Bintu Amuda, Oluwatoyosi Tolulope Olurin

South Asian Journal of Social Studies and Economics, Page 1-8
DOI: 10.9734/sajsse/2019/v3i330108

One of the indicators of shareholders’ wealth maximization is dividend policy (DP) consistency, proxied by dividend per share (DPS) with moderating variable of company size and financial performance measured by the return on asset (ROA). The purpose of this study is to demonstrate the significance level of changes in ROA based on DPS comparing manufacturing companies in Nigeria and Kenya. The data used in this study is the use of panel data method and Convenience Sampling is applied and data analyzed by comparing the regression model, Ordinary Least Square (common effect). The results indicate that there is a significant positive effect on ROA in Kenya manufacturing companies, while Nigeria’s records insignificant negative effect as revealed by the t-statistics due to DP. These undeveloped economies’ relevant sector for growth is the manufacturing and is the focus of this study. The paper concludes by recommending that Kenya and Nigeria manufacturing companies should focus on DP.