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The IUP Journal of Accounting Research and Audit Practices


Free flow of capital across the borders internationally is a complex issue because of the differences in accounting processes across the world. International Financial Reporting Standards (IFRS) bring all the firms on one platform for presenting their financial performance

The Impact of Adoption of IFRS on Shareholders’ Wealth: A Study of Select Indian Companies
Small Businesses and Accounting Skills: A Study on Entrepreneurs of Ahmedabad City
Value Relevance of Accounting Information: An Empirical Study on Construction Companies Listed on Bombay Stock Exchange
Evaluating the Financial Performance of Select Indian Banks Using Eagles Model
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The Impact of Adoption of IFRS on Shareholders’ Wealth: A Study of Select Indian Companies

--Samta Ordia and Shurveer S Bhanawat

International Financial Reporting Standards (IFRS) are designed as a common set of language for business affairs so that company accounts could be understandable and comparable across international boundaries. IFRS leads to changes in the financial statement of the company. In order to check whether shareholders’ wealth is affected or not by adoption of IFRS, the present research has been carried out. The objectives of the present paper are to determine the shareholders’ wealth in terms of EVA (absolute and relative) before and after adoption of IFRS for Indian companies and to examine the different components of EVA before and after adoption of IFRS in India. To check the impact, paired data t-test has been administered for testing significance. The results of the study reveal that there is no improvement in EVA and EVA-related financial parameters due to IFRS adoption. For consistency concern, coefficient of variation has also been calculated. The results indicate that consistency in EVA and EVA-related financial parameters is observed after adoption of IFRS. It may also be concluded that the fundamental principle of accounting, i.e., consistency, is supported to a large extent by IFRS adoption.

Small Businesses and Accounting Skills: A Study on Entrepreneurs of Ahmedabad City

--Himani Sardar

Entrepreneurs are agents and drivers of development in most economies of the world. Basically, more focus is laid on the entrepreneurial process of a firm rather than of individuals. Entrepreneurship leads to the development of new ideas, but old ideas are needed to create a balance. Accounting skill is found to be of great value in entrepreneurial performance, and as such, entrepreneurs are advised to embark on capacity building in accounting skill for financial management and record keeping. With reference to location of knowledge and structure of accounting policies, this research has been conducted to view the familiarity, awareness and usage of accounting information carried out by small entrepreneurs of Ahmedabad city. The basic objective of the study is to examine the status of familiarity and application of accounting. For this purpose, primary data was collected through a questionnaire comprising 12 questions. The 70 responses considered were tabulated and analyzed. Questions like information about different accounting methods, adoption of different methods, etc. were covered. It is found that more than 15% of the respondents are unaware of different kinds of accounting system, while about 25% are familiar with Desi-nama system. From the findings, it is concluded that awareness regarding accounting principles and methods is prevalent, but still entrepreneurs need accountants to help them with numbers as they lack the skill.

Value Relevance of Accounting Information: An Empirical Study on Construction Companies Listed on Bombay Stock Exchange

--Geetanjali Purswani and Anuradha P S

This study aims at providing empirical evidence related to value relevance of earnings per share, book value per share, dividend per share, price-to-book value per share, cash flow from operations, net worth and assets turnover ratio on the share price of construction contract of real estate companies listed on Bombay Stock Exchange (BSE). The study is conducted using secondary data. Two panel data techniques, i.e., fixed-effect model and random effect model, are employed to examine the value relevance of accounting information in construction companies listed on BSE. Earnings per share and price-to-book value per share are reported to have positive and statistically significant relationship with share price.

Evaluating the Financial Performance of Select Indian Banks Using Eagles Model

--G Santhoshi Kumari and M S V Prasad

Banking sector plays an important role in the economic development of a country. In India, Eagles model is capable of measuring and comparing banks’ performance in a more determinate, objective and consistent manner. There is no subjectivity involved in Eagles model, and the banks are judged purely on the output ratios and ranked based on these parameters. The present study uses 10 years’ data of selected 10 public and private sector banks. The results reveal that Yes Bank is in top position in terms of Return on Assets (ROA), gross NPA, and Provision Coverage Ratio (PCR). This indicates that Yes Bank has more earning capacity as compared to the remaining selected banks. Kotak Mahindra Bank is also performing efficiently in terms of investment-to-deposit and Capital Adequacy Ratio (CAR), which indicates that private sector banks are performing well as compared to public sector banks. Among public sector banks, State Bank of India is performing efficiently in loans and deposits component. The study proves that there is a significant difference in the performance of selected public and private sector banks.



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Automated Teller Machines (ATMs): The Changing Face of Banking in India

Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.

The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario

If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.

Indian Scenario

The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.


Accounting Research and Audit Practices