Information Technology, Audit Evidence and Financial Performance of an Organization (Published)
Financial information is expected to inform its stakeholders about an organization concerning the best objective decision making options. Most financial statements appear misleading occasioned by inappropriate application of discretionary accruals which falsify financial information. It is on this note that the research was carried out to further investigate the assertion. The research design adopted seventy (70) manufacturing companies contained in the stock exchange fact book of 2013 .The basis of this selection was on companies industrial output on yearly ratings by Manufacturing Association of Nigeria (MAN). The period of study covered seven years i.e. 2007 to 2013. In the Nigerian Stock Exchange Calendar, 2007 marked the end of the period of boom in stock trading after which the stock market experienced a near collapse in the stock prices to date. Findings revealed that the combination of electronic and manual sources of evidence complemented by the audit committee oversight function have positive significant effects on the financial performance of companies. Specifically, audit committee was found to have significant impact on financial performance of the entities via effective corporate governance. In particular, boards of firms that have functional and effective audit committee appear to have effectively oversee the financial transactions of the firms, and managers generally agree to comply with the board directives as prescribed. The evidence confirmed that audit committee, when constituted mostly of independent or non-executive directors, have a restraining effect on unauthorized actions of executive managers. It was concluded that the complementary role of IT, audit evidence and audit committee, ensure effective financial disclosure and by extension the financial position of an organization. It was therefore recommended that to ensure credibility of financial statement performance, the application of IT, audit evidence and the contribution of the audit committee be handled professionally. These should also be disclosed appropriately in the financial statement.
Keywords: Audit Committee, Audit Evidence, Financial Performance, Information Technology
EVALUATING THE FINANCIAL PERFORMANCE OF BANKS USING FINANCIAL RATIOS- A CASE STUDY OF ERBIL BANK FOR INVESTMENT AND FINANCE (Published)
This study investigates the financial performance of Erbil Bank for Investment and Finance, Kurdistan Region of Iraq during the period of 2009-2013. Several financial performance parameters are used such as financial ratios analysis which is used to measure the financial position for the bank and on broader range statistical tools also have been used for analysis purpose of several variables which would affect the banking system in general in order to know whether these variables are significantly correlated with the financial performance for the bank. The findings of the study show the positive behaviour of the financial position for Erbil Bank and some of their financial factors variables influence the financial performance for the bank. Then, it is found that the overall financial performance of Erbil Bank is improving in terms of liquidity ratios, assets quality ratios or credit performance, profitability ratios (NPM, ROA, ROE). This study suggests a set of recommendations regarding the development and enhancing of some banking operations which will boost the bank’s profitability and improve the financial performance for the bank
Keywords: Case Study, Erbil Bank, Evaluating, Financial Performance, Financial Ratios
THE IMPACT OF CORPORATE GOVERNANCE PRINCIPLES APPLICATION ON FINANCIAL PERFORMANCE OF PUBLIC SHAREHOLDING COMPANIES LISTED IN AMMAN STOCK EXCHANGE (Published)
This study aimed to investigate the extent of corporate governance principles in the public shareholding companies listed on the First Market in Amman Stock Exchange .To achieve the objective of this study , the researchers distributed 55 questionnaires to first market companies in Amman Stock Exchange, The results showed that there is a strong application of corporate governance principles in the public shareholding companies listed in the First Market in the Amman Stock Exchange .Moreover there is a declination in staff awareness of public shareholding companies listed in the First Market in the Amman Stock Exchange , the importance of corporate governance and its principles .In addition, there is also a declination related to hide some information to shareholders , whether financial or non-financial , and a declination of disclosing strengths and weaknesses points , either in company’s financial system or its disclosures annual reports management in the, and a decrease in Board of Directors member occupation of any executive function ,either with or without salary
Keywords: Amman Stock Exchange, Financial Performance, Governance, Shareholding
INTELLECTUAL CAPITALS AND FINANCIAL PERFORMANCE INDICES OF DEPOSIT MONEY BANKS IN NIGERIA: A COMPARATIVE ASSESSMENT (Published)
The emergence of high technology, information, and innovation based environment in the world today has greatly altered the way and manner businesses are done globally. This new technology which of course utilizes high level of intellectual capital also determines the level of financial performance of business organizations. Some organizations which hitherto were rated very high in terms of their profitability and other financial performances are today being rated very low simply because of their non-adoption of this intellectually based technology. This study uses the Value Added Intellectual Coefficient (VAIC) model to compare both the intellectual capital indices as well as the financial performance variables of six highly rated banks in Nigeria with the aim of determining if the deviations in their financial performance indices could be explained by the deviations in the banks’ intellectual capital variables. The study adopted the ex-post facto research design. It was systematically conducted using longitudinal time series data generated from the Nigeria Stock Exchange and from annual reports and accounts of the selected banks in Nigeria spanning from year 2000 to 2012. The study adopted the Duncan Multiple Range Test (DMRT) of ANOVA across the six selected banks in Nigeria for the test of the hypotheses. The SPSS statistical software (version 17.0) was used for the data analysis. From the analyses, it was discovered that there were significant deviations in both the financial performance indicators and in the intellectual capital variables among the six banks studied. The results further showed that the banks are statistically different in both the intellectual capital indices and in the financial performance indicators. The study also established that the banks with high intellectual capital also recorded high financial performance and therefore recommends that all banks should embrace this new intellectually based technology in order to enhance their financial performances, returns to their different stakeholders as well as in their service delivery to their customers.
Keywords: Financial Performance, Intellectual Capital, Nigerian Banks, VAIC
A Critical Analysis of Financial Performance of Agricultural Development Bank (Adb, Ghana) (Published)
Until recently, many of the banks in developing countries were state owned or locally established with varied mandates to focus on different sectors of the economy. Some of these state banks are bedevilled with peculiar set of challenges making some of them inefficient and unprofitable and in some instances insolvent. Financial performance analysis is aimed at keeping the banks in checks by highlighting low and high performance areas with the understanding that it will bring about improvement in performance. The PELARI (Profitability, Efficiency, Liquidity, Asset Quality, Risk Measures and Investor analyses) model was developed for analysis by the researchers which is similar to the CAMELS’ rating. Financial ratio analysis is employed in the analysis. Troubled signals models such as the Altman z-score for non-manufacturing companies and risk index were also used to measure risk. The Altman z-score generated for 2011 and 2012 showed a figure of less than 1.1 which put the bank in the distress zone category. It was evident from the analysis that ADB’s focus on agricultural financing is diminishing since a sector analysis of loans and advances indicates that the agriculture sector lost its first position to the services sector which recorded 38% compared with agriculture 29% in 2012. The bank’s liquidity showed a downward trend and slipped further down in 2010 confirming the Ghana Banking Survey (2011) assessment that the bank is illiquid.
Keywords: Analysis, Bank, Development, Financial Performance, Liquidity
Evaluation of Financial Health of Mmtc of India: A Z Score Model (Published)
Financial position of any company can be easily evaluated through its profitability, liquidity, solvency and activity ratios. Ratio analysis is one of the most easiest and competent tool to evaluate the financial soundness of a company. In this paper the financial health of MMTC has been evaluated by using ratio analysis and the chances of bankruptcy in the near future is evaluated with the help of Z score developed by Prof. Edward I. Altman (1968). From the study of five years (2007-08 to 2011-12), it is deduced from the analysis that profit earning capacity and short term investing capacity of MMTC is quite good, but its financing position of assets is comparatively poor. However the Z score value indicates that it is in a strong position, and it has no chances of being bankrupt in the next two years.
Keywords: Bankruptcy, Financial Performance, Ratio Analysis, Z Score