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The IUP Journal of Accounting Research and Audit Practices
ISSN: 0972-690X
A ‘peer reviewed’ journal indexed on Cabell’s Directory,
and also distributed by EBSCO and Proquest Database


Previous Issues

The IUP Journal of Accounting Research and Audit Practices is a quarterly journal that seeks to provide a platform for cutting edge research in the field of accounting for the benefit of academia and profession at large. IJARAP delivers auditing research articles on financial accounting, management accounting, auditing, accounting standards, taxation, IT-Accounting interface and R&D reporting biases and their consequences.

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Editorial Board
Information to Authors
Focus Areas
  • Financial Accounting
  • Management Accounting
  • Forensic Accounting
  • Accounting Standards
  • Taxation
  • IT Accounting Interfacing
  • Auditing
  • Corporate Disclosures
  • Internal Audit
  • Audit of Financial Statements
  • Audit Education
  • Cost Audit
  • Tax Audit
  • Audit Standards and Assurance
  • Social Audit
  • Environmental Audit
  • Quality Audit
Decision Usefulness of Corporate Environmental Reporting and Firm Performance: Evidence from Sri Lanka
Related Party Transactions and Earnings Management: An Empirical Examination of Selected Companies in India
Microeconomic and Macroeconomic Determinants of Efficiency: Evidence from Indian Industrial Machinery Sector
Earnings Management Strategies During Financial Distress
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(July 2018)

Decision Usefulness of Corporate Environmental Reporting and Firm Performance: Evidence from Sri Lanka

--D M M B Dissanayake and E M A S B Ekanayake

The study attempts to assess the degree to which Corporate Environmental Reporting (CER) contributes to firm performance in Sri Lanka. Four qualitative characteristics of financial information as stated in the Conceptual Framework for Financial Reporting (i.e., relevance, faithful representation, understandability and comparability) and three performance indicators (i.e., ROA, ROE and EPS) have been used to measure the decision usefulness of CER information and firm performance, respectively while three variables, namely, growth, firm size and leverage, were controlled in the study. For this purpose, top 30 companies based on the market capitalization in the Colombo Stock Exchange (CSE) of Sri Lanka were selected as the sample. Data were gathered from the annual reports of these companies during the period from 2013 to 2016, and data analysis was carried out using content analysis, descriptive statistics, Pearson correlation coefficient and multiple regression analysis. The findings show that scores for the two fundamental characteristics (i.e., relevance and faithful representation) were relatively lower than those of the enhancing qualitative characteristics (i.e., comparability and understandability), indicating a lower level of decision usefulness. With regard to the association between CER reporting and firm performance, it was evident that there is a positive association between the two variables. The findings of the study have significant policy implications such as the importance of provision of environmental information for decision making purposes rather than merely satisfying the stakeholders of companies.

The Relationship Between Corporate Environmental Reporting Practices and Company Characteristics: Evidence from India

--Mahesh Chand Garg and Sandeep Kumar

This study investigates the extent of environmental information disclosure in the annual reports of companies listed on the stock Dollex-200, and tests whether there is any relationship between the amount of environmental disclosure index and company characteristics such as industry type, age, size, profitability, liquidity and leverage. By using a purposive sampling method, 90 Indian private listed companies were selected as of March 31, 2014. The findings indicate that 62% of the companies have environmental disclosure of 20 to 50% in their annual reports. The results of the study also indicate that industry type and size (total assets, profit after tax and net sales) of the company are positively affected by the extent of environmental information disclosure in annual reports. These results imply that larger companies disclose more environmental information than smaller companies. However, there is no significant relationship between the extent of environmental disclosure and other company characteristics such as market capitalization, age, profitability, liquidity and leverage.

Microeconomic and Macroeconomic Determinants of Efficiency: Evidence from Indian Industrial Machinery Sector

--Sumit Kumar Maji

Industrial machinery industry is one of the most important drivers of growth of the manufacturing sector in the Indian economy. The importance of this industry can be understood from the fact that it produces a wide range of machinery that is at the core of other manufacturing industries in India. Moreover, this sector can contribute towards generating foreign earnings and employment. There are 97 listed companies in this segment, which makes this sector highly competitive. Thus, the firms have to be efficient in order to endure in the long run. The present study seeks to evaluate the efficiency of the 43 (44.33%) select industrial machinery firms for the period 2001-02 to 2014-15 with the help of Stochastic Frontier Analysis in the first stage. In the second stage, the determinants (both microeconomic and macroeconomic) of such firm level efficiency are explored using Panel Censored Tobit Regression Model. The results of the study show that leverage, size, openness, age and inflation are the major determinants of the efficiency of the industrial machinery firms operating in India during the period of study.

Earnings Management Strategies During Financial Distress

--Neerav Nagar and Kaustav Sen

The paper examines whether financial distress and its severity have a role to play in managers’ decisions with respect to the choice of earnings management strategies. The results suggest that firms in initial stages of distress engage in real earnings management through a reduction in the spending on selling and general and administrative expenses, and through classification shifting to increase profitability and liquidity. When distress becomes severe, firms cut back on production, engage in income-increasing accruals management, and increase their spending on selling and general and administrative expenses. Initial under-spending on selling and general and administrative expenses is opportunistic with an intention to show improved performance. In extreme distress, increase in such spending is a sound economic decision. The findings provide insights into how managers of distressed firms trade off between liquidity, profitability and solvency both in the short run and the long run.




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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.