Oct'20

Welcome to The IUP Journal of Accounting Research and Audit Practices

Focus

The investors' overreaction to the market sentiments due to the psychological distortions in their judgment could be one of the major reasons for their irrational investment behavior. Added to this, the varied financial products that enter the Indian financial markets also affect the investors' judgment. The investors' inclination to buy these new products by altering their existing consumption patterns is called dispositional innovativeness. The investors' psychological tendency to invest in innovative financial products has been studied by Anu Antony, the author of the first paper, "The Effect of Dispositional Innovativeness on Investment Behavior". The author focuses on investor behavior towards the new innovative financial instruments and the role of dispositional innovativeness in the investment preference of the investors. The author finds that though the awareness towards new financial instruments is high, investors always prefer to invest in traditional avenues.

In order to minimize the risk involved, investors do prefer to have a diversified portfolio. Such investors are offered two major options, mutual funds and index funds. The similarities and differences between these two options have been considered by investors in choosing their investments. The performance of these two funds has been considered and compared with respect to India and the US by Rahul Bhatia and Bhanu Sireesha, the authors of the second paper, "A Note on the Performance of Index Funds and Mutual Funds: India Versus US". The study checks whether the passively managed index funds outperform the actively managed mutual funds or not in both India and the US. On comparing the performances of both the funds in both the countries, the authors find that the Indian markets show potential for the mutual funds in offering better returns than the index funds. The intellectual capital assists in creating wealth and in the production of other high valued assets. In a business, it includes the wealth of the ideas and the ability for innovation which highly determines the future of the firm. The growing importance of intellectual capital led the authors take up a review of all the studies on intellectual capital existing in the literature for the past 10 years, in order to obtain a proper understanding of the concept. Soumya Singhal, Seema Gupta and Vijay Kumar Gupta, the authors of the third paper, "Mirroring a Decade-Long Experience on Intellectual Capital", have studied and presented a structured literature review of 226 papers published from 2009 to 2018 in specialized and generalized journals.

Islamic banks operate under the Sharia principles of risk sharing and interest prohibition as against the conventional banks that buy capital to pool funds and sell capital to generate interest income or profit. Applying the banks' internal factors related to their financial statements, Arindam Banerjee and Manoj Kapur, the authors of the last paper, "A Comparative Financial Ratio Analysis of Conventional and Islamic Banks in GCC", compare and contrast the fundamental differences between Islamic banks and conventional banks with special reference to the banks operating in the GCC region. The paper explains the structure, operation and management of the banks, coupled with the functioning of the Islamic banks. It also determines the profitable and efficient banks among the sample chosen.

- P Bhanu Sireesha
Consulting Editor

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Article   Price (₹) Buy
The Effect of Dispositional Innovativeness on Investment Behavior
50
A Note on the Performance of Index Funds and Mutual Funds: India Versus US
50
Mirroring a Decade-Long Experience on Intellectual Capital
50
A Comparative Financial Ratio Analysis of Conventional and Islamic Banks in GCC
50
       
Contents : (Oct'20)

The Effect of Dispositional Innovativeness on Investment Behavior
Anu Antony

The paper integrates the findings of marketing and finance literature to increase the understanding of the investor's psychological tendency to invest in innovative financial products. Even though innovation was found to be an indispensable factor, the present study focused on investor behavior towards the new innovative financial instruments. The research further investigated the role of dispositional innovativeness in the investment preference of the investors. It was found that investor awareness towards the new financial instruments is high, but they always prefer to invest in the traditional avenues. Along with dispositional innovativeness, ambiguity intolerance was also tested. The sample was extracted from the investors of Kerala. Structural equational modeling was applied to test investor behavior. Parameters such as investment objectives, herd behavior, asset familiarization, ambiguity intolerance and risk tolerance were tested.


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A Note on the Performance of Index Funds and Mutual Funds: India Versus US
Rahul Bhatia and Bhanu Sireesha

For long, it has been an on-going discussion among investors, statisticians, fund managers, traders, etc. as to whether index funds are outperforming mutual funds or not. Index funds are passively managed and mutual funds are actively managed. The statistics shows that India behaves differently compared to US in this matter.


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Mirroring a Decade-Long Experience on Intellectual Capital
Soumya Singhal, Seema Gupta and Vijay Kumar Gupta

Keeping in view the growing importance of Intellectual Capital (referred to as IC), there was a need to combine all the studies together for the benefit of proper understanding of the concept. The paper presents a structured literature review for 10-year period (2009-2018) of the dataset of 226 papers related to seven specialized and generalized journals in the field of IC. The sample studies have been categorized under six attributes to answer all the three basic research questions. The findings of meta-analysis reveal that maximum research related to IC has been conducted in public listed companies and content analysis is used in a majority of the studies. The study also reveals the areas where less or no research has been performed.


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A Comparative Financial Ratio Analysis of Conventional and Islamic Banks in GCC
Arindam Banerjee and Manoj Kapur

Banking system constitutes the fundamental pillar of every economy. Banks act as financial intermediaries between sectors that have excess funds and those that are in deficit. The history of banking in the Gulf Cooperation Council (GCC) region dates back to 1918 with the establishment of the first bank in Bahrain. The regional banking sector is unique in nature owing to oil wealth and lending business that focuses on building, real estate and customer loans. Over the years, the banking system has evolved globally in its offerings to suit the changing consumer demands. One of the primary determinants of this change resulted from the religious beliefs of the people resulting in the phenomenal growth of Islamic banking system. The predominance of these banks is in countries with significant Muslim population such as Iran, Pakistan and Sudan, but not restricted to them. Islamic banks operate under Sharia principles of risk sharing and interest prohibition as contrasted with conventional banks that buy capital to pool funds and sell capital to generate interest income or profit. This paper applies banks' internal factors related to their balance sheet and income statement. Using a total of 24 financial ratios pertaining to the internal factors, the paper attempts to compare and contrast between conventional and Islamic banks. This research explains the structure, operation and management of banks in the GCC region coupled with the functioning of Islamic banks. The paper also aims at determining the profitable and efficient banks among the chosen sample. The sample includes 20 banks, equally distributed between Islamic and conventional banks, using data for the period 2014 to 2017. The sample is broadly categorized based on profitability ratio, efficiency ratio, asset indicator ratio and risk ratios. Further sub-categorization is done to arrive at a total of 24 ratios. An independent t-test is used to determine a substantial ratio between Islamic and conventional banks.


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Article Price : Rs.50