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Determinants of Commercial Banks Deposit Growth Evidence from Ethiopian Commercial Banks
Habtamu Alebachew Legass,
Anwar Adem Shikur,
Omer Mohammed Ahmed
Issue:
Volume 9, Issue 6, November 2021
Pages:
207-215
Received:
21 September 2021
Accepted:
28 October 2021
Published:
5 November 2021
Abstract: The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, broad money supply, and Inflation. While bank-specific variables included are branch expansion and bank size. Since the study employed panel data in line with the nature and data of the study ordinary least square method estimation were used subsequently after the necessary diagnostic tests and Hausman test performed to determine the appropriateness of fixed effect. The result of the study indicate branch macroeconomic factors such as bank size, broad money supply, and inflation significant positive effect on deposit growth of commercial banks. Contrarily, Age dependency ratio and population growth have a statistically significant negative effect on deposit growth. The unemployment rate, on the other hand, has been found to have a positive but statistically insignificant relationship. The bank-specific factors indicate the branch expansion has a positive significant association while Bank size has a positive but insignificant relationship with deposit growth of commercial banks. Finally, the study suggests there should be a stable macroeconomic environment that reduces the effect of inflation, money supply, population growth, and from a bank-specific perspective aggressive branch expansion is essential for the growth of deposits in commercial banks in Ethiopia.
Abstract: The purpose of this research is to examine major causes of deposit growth in commercial banks in Ethiopia with explicit inference on industry specific and Macro-Economic variables. The research used secondary data from 2010-2019. Macro-economic factors selected under this study consist of age dependency ratio, unemployment rate, population growth, ...
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Antecedents of IFRS Compliance: The Moderating Effect of Audit Quality
Martin Kabwe,
Erastus Mwanaumo,
Henry Chalu
Issue:
Volume 9, Issue 6, November 2021
Pages:
216-229
Received:
8 October 2021
Accepted:
4 November 2021
Published:
10 November 2021
Abstract: Despite the significant non-compliance with IFRS, most audit reports provide unqualified opinion which brings into question the audit quality in enforcing IFRS compliance. Therefore, the purpose of the study was to examine the antecedents of compliance with IFRS by focusing on the moderating effect of audit quality on the association of firm characteristics and IFRS compliance. The collection of data was done through quantitative content analysis of annual reports of 20 Zambian listed companies and Zambia Institute of chartered Accountants covering the years 2012 to 2018. Being a longitudinal study requiring panel data analysis, a Hausman test was done to choose the model to employ. The Hausman test showed that the random effect model was suitable. Results indicate that audit quality moderates the association of firm characteristics and IFRS compliance. Also, there was a positive association between firm size and compliance with IFRS. There was a negative association between firm profitability and compliance with IFRS. However, there was a statistically insignificant positive association between foreign investors, institutional investors, audit quality and IFRS compliance. The study suggests that large companies are expected to comply more with IFRSs and profitable firms withhold financial information. Audit quality was not impaired probably due to the size of the audit firms and international affiliation. Meanwhile, the influence of institutional investors and foreign investors on IFRS compliance was insignificant probably because both institutional and foreign investors in Zambian listed companies are transient investors without significant incentives to demand financial disclosures and they may have other means to access financial information. The financial reporting regulators should focus on enhancing audit quality for listed companies in Zambia and even in other African countries. Future research can focus on the relevance of IFRS disclosures to the domestic investors in Africa considering the cultural differences both at firm and national-level.
Abstract: Despite the significant non-compliance with IFRS, most audit reports provide unqualified opinion which brings into question the audit quality in enforcing IFRS compliance. Therefore, the purpose of the study was to examine the antecedents of compliance with IFRS by focusing on the moderating effect of audit quality on the association of firm charac...
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Full Coverage of Internal Audit Based on Value Chain Analysis
Issue:
Volume 9, Issue 6, November 2021
Pages:
230-235
Received:
15 October 2021
Accepted:
1 November 2021
Published:
10 November 2021
Abstract: In order to adapt to the requirements of corporate governance, internal audit must enhance its value and innovate itself to meet new challenges. The value of internal audit mainly lies in the improvement of internal value rather than the improvement of quantitative value. The improvement of internal audit value must be aimed at risk management and internal control. The core of internal audit innovation is the innovation of audit concept and audit thinking mode, and the basic foothold should be on the innovation of audit content, which is the full coverage of internal audit. Full coverage of internal audit refers not only to the full coverage of the audited entity, but also to the full coverage of the audit content. Internal audit should not only be limited to the flow of funds, but should jump out of the small circle of financial audit and march into the decision-making audit and strategic audit. The scope of internal audit must be extended to all aspects of enterprise economic activities. Full coverage of internal audit requires that internal audit must be value-added internal audit aimed at increasing enterprise value, which is value chain audit. Based on the value chain analysis as the breakthrough point, putting the internal audit activity into the organization's value chain, the author put forward that the tentacles of the internal audit should be thoroughly all the value chain analysis, and according to the type of cost drivers respectively constructed three kinds of value-added internal auditing mode, the structured audit mode, process-based audit model and nodal audit model.
Abstract: In order to adapt to the requirements of corporate governance, internal audit must enhance its value and innovate itself to meet new challenges. The value of internal audit mainly lies in the improvement of internal value rather than the improvement of quantitative value. The improvement of internal audit value must be aimed at risk management and ...
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Explanatory Elements of the Deformations of the Term Structure of Interest Rates
Issue:
Volume 9, Issue 6, November 2021
Pages:
236-248
Received:
19 October 2021
Accepted:
8 November 2021
Published:
17 November 2021
Abstract: The interest rate curve has often been defined as a graphical representation of the yield offered by bonds of a single issuer according to their maturity, from shortest to longest. The best-known yield curve, which serve as a benchmark for the entire bond market in a given country, is that of the government bonds. Indeed, the shape of the interest rate curve on sovereign bonds provides information on investor’s expectations on the risk of default of the issuing state as well as on the level of inflation and future interest rates. As a result, it is a good indicator of the economic and financial health of the issuing country. In a stable economic environment marked by low inflation and sustainable public debt, bond yields increase with the maturity of securities. This is explained by the fact that the longer the maturity, the greater the risk of events occurring that could adversely affect the value of the bond security. Indeed, the further in time one goes, the greater the uncertainty about the issuer’s repayment capacity or about the level of interest rates. Under these conditions, investors require a risk premium to lend on long maturities compares to short maturities. However, as government loans are generally considered to be loans for which repayment is certain, the associated risk premiums are low or almost zero. On the longest maturities (20 to 50 years), the default risk as well as the interest rate or inflation risks can be considered to be broadly identical. This is the reason why the yield curves on government bonds of most "so-called" developed countries have an increasing and concave shape. This article highlights the explanatory factors of the structure of forward interest rates by proposing a multifactorial model of asset valuation that is at the same time exhaustive, simple, intelligible and realistic. The underlying objective is to propose techniques hedging against the risk of interest rates more effective than traditional techniques, especially since we live in an extremely sensitive and changing environment because of the consequences of covid-19 on economies. The contribution is part of the research movement aimed at improving the multifactorial models of the yield curve and to overcome the shortcomings of the techniques traditionally used.
Abstract: The interest rate curve has often been defined as a graphical representation of the yield offered by bonds of a single issuer according to their maturity, from shortest to longest. The best-known yield curve, which serve as a benchmark for the entire bond market in a given country, is that of the government bonds. Indeed, the shape of the interest ...
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Switching to Semi-annual Financial Statement Reports - Market Reaction, Audit Fee and Corporate Governance Quality
Issue:
Volume 9, Issue 6, November 2021
Pages:
249-257
Received:
25 October 2021
Accepted:
15 November 2021
Published:
23 November 2021
Abstract: The aim of the research is to examine the reaction of market participants (investors and firms) to a regulatory exogenous shock of easing financial reporting statement regulations. Since 2017, small cap firms, publicly traded on Tel-Aviv stock exchange, are required to publish only Semi-annual reports hence any firm may opt to switch from formerly mandatory quarterly reporting to the currently required semi-annual financial reporting statement. We show that 2/3 of the firms chose to adopt the relief in regulation. In the group of firms that chose to apply the regulation relief, we find a significant negative abnormal market reaction of -2% to the announcement of adopting the relief. In the group of firms that waive the regulation relief and chose to stay on quarterly reporting, we observe a significant positive abnormal market reaction of +2.5% to the announcement of voluntary continuing with the quarterly financial reports. Moreover, for the firms that switch to semi-annual reports, we show a significant decrease of 19.8% in the number of external auditing hours and a significant decrease of 16% in the annual external total audit fee in 2017 as compared to 2016. No significant change in the annual external total audit fee has been observed for the firms that opted not to adopt the abovementioned regulation. We also collect additional information about institutional investor holdings and outside directors which serves on these boards (financial expertise, gender and "busyness") as signals to corporate governance quality. We find positive and significant associations between the voluntarily continue the quarterly financial reporting and high quality corporate governance. The findings of the event study provide a valuable contribution to the ongoing debate on the relevance of the quarterly financial reports to investors. The additional finding of lower corporate governance quality and decreased external audit effort which characterized the firms that adopt the relief represent an increased risk for information asymmetry for investors in such firms thus further reinforces the importance of frequent financial reporting.
Abstract: The aim of the research is to examine the reaction of market participants (investors and firms) to a regulatory exogenous shock of easing financial reporting statement regulations. Since 2017, small cap firms, publicly traded on Tel-Aviv stock exchange, are required to publish only Semi-annual reports hence any firm may opt to switch from formerly ...
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A Study on the Relationship Between Technical Independent Directors and Enterprise Innovation Under Media Attention
Zheng Yong,
Lai Anqi,
Rongrong Lin,
Yong Hu
Issue:
Volume 9, Issue 6, November 2021
Pages:
258-267
Received:
26 May 2021
Accepted:
4 October 2021
Published:
29 November 2021
Abstract: Independent director system plays a unique role in increasing the diversity of board members and increasing a company's intellectual capital. Based on prospect theory and signal theory, the media can also be considered to change the reputation level of independent directors on the board of directors of listed companies by disclosing relevant information about them and company operations. Moreover the media attention can not only accelerate the dissemination and promotion of knowledge and information, but also weaken the competitiveness of companies, reduce the value of companies, and then weaken their enthusiasm to invest in innovative projects This paper takes listed companies in the Chinese information technology industry from 2012 to 2017 as the research object and uses the multiple linear regression method to model the relationship between technical independent directors and enterprise innovation under the attention of the media. It is found that the technical independent director plays a positive role in consulting, supervising and strategic decision-making, which can improve the company’s innovation performance. At the same time, media attention weakens the positive impact of technology independent directors on enterprise innovation. The outcomes improve our understanding of the role of media in enterprise innovation and provide a new perspective and reference value for the construction of independent director systems and enterprise innovation.
Abstract: Independent director system plays a unique role in increasing the diversity of board members and increasing a company's intellectual capital. Based on prospect theory and signal theory, the media can also be considered to change the reputation level of independent directors on the board of directors of listed companies by disclosing relevant inform...
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Data-Driven Market Segmentation in Insurance Industry and Other Related Sectors
Chen Wen,
Ke Gao,
Yuanzhi Xiao
Issue:
Volume 9, Issue 6, November 2021
Pages:
268-272
Received:
2 November 2021
Accepted:
6 December 2021
Published:
7 December 2021
Abstract: This paper talks about various approaches and models on customer segmentation in the insurance industry and other related sectors. In today's business world, especially the customer-centered industry, the most critical task is to find the right customers and serve the customers the way that most suits them. In this paper, we put our focus on the insurance industry for several considerations. One insurance company can possess hundreds of different policies, so it is crucial for policy issuers to find suitable policies for different customers. Considering the complexity and variability of different policies, insurance companies view customer segmentation as necessary and the key point for companies to compete well. Therefore, we select the insurance industry to study the effect of data-driven approaches on customer segmentation. In the first part, we discussed the need for a new approach to classify the customers and several advantages of the data-driven approach over the traditional method. In the second part of the paper, segmentation approaches such as K-means clustering, hybrid clustering, rule mining, and decision tree are discussed respectively about their processes and features. In the third part, we talked about the two current customer segmentation applications that are widely used today. We also talked about the segmentation systems in determining the risk of transmission of COVID-19. In the last part, we conclude the paper with the comparison of different approaches we discussed.
Abstract: This paper talks about various approaches and models on customer segmentation in the insurance industry and other related sectors. In today's business world, especially the customer-centered industry, the most critical task is to find the right customers and serve the customers the way that most suits them. In this paper, we put our focus on the in...
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Factors that Affect Government Accountability with Moderating Variable Accounting Control
Andi Wawo,
Jamaluddin Majid
Issue:
Volume 9, Issue 6, November 2021
Pages:
273-284
Received:
14 November 2021
Accepted:
1 December 2021
Published:
24 December 2021
Abstract: This study aims to determine the effect of budget performance, budget objectives and value for money on government performance accountability with accounting control as a moderating variable. This research was conducted by purposive sampling as many as 50 respondents from 14 Regional Work Unit at the Makassar City Government using multiple linear regression analysis. The results showed that budget performance, clarity of budget objectives and value for money had a significant and positive effect on government performance accountability. Likewise, accounting control is able to strengthen the relationship between budget performance and value for money on government performance accountability, while accounting control does not strengthen the relationship between clarity of budget objectives and government performance accountability.
Abstract: This study aims to determine the effect of budget performance, budget objectives and value for money on government performance accountability with accounting control as a moderating variable. This research was conducted by purposive sampling as many as 50 respondents from 14 Regional Work Unit at the Makassar City Government using multiple linear r...
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