AJAR (Asian Journal of Accounting Research) (e-Journal)
The Asian Journal of Accounting Research (AJAR) provides a forum for international researchers to publish original articles of high-quality research findings which contribute to academic literature and practice. AJAR welcomes a wide range of methodologies in all aspects of accounting and finance in developing countries, with a majority in Asia. The scope of AJAR includes, yet not limited to: - Accounting information system - Asset pricing - Auditing and financial accounting - Behavioral accounting and finance - Corporate finance and governance - Digital accounting and finance - Financial markets and institutions - International accounting and finance - Islamic accounting and finance - Management accounting - Market microstructure - Public sector accounting - Taxation The journal is administered by the Department of Accountancy, Faculty of Economics and Business, Universitas Airlangga, Indonesia. This journal is associated with the Airlangga Accounting International Conference (AAIC).
Articles
111 Documents
<![CDATA[Nexus between intellectual capital and business performance: evidence from India ]]>
<![CDATA[Faizi Weqar]]>;
<![CDATA[Zubair Ahmad Sofi]]>;
<![CDATA[S.M. Imamul Haque]]>
<![CDATA[ Asian Journal of Accounting Research Volume 6 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-07-2020-0064
<![CDATA[The prime intention of this study is to examine the influence of intellectual capital (IC) on the financial performance of Indian companies listed on Standard and Poor Bombay Stock Exchange Sensitive Index (BSE SENSEX).The study employs the data of 30 most significant and most prominent companies of India listed on BSE SENSEX for 10 years from 2009–2010 to 2018–2019. Value Added Intellectual Coefficient (VAICTM) methodology developed by Pulic (2000) was employed for measuring the efficiency of the IC.The efficiency of IC is substantially and positively associated with the financial performance of the Indian companies as measured by return on assets (ROA), market-to-book (MB) ratio and return on equity (ROE). Amongst the three dimensions of VAIC, capital employed efficiency (CEE) was the most vital element in contributing to the firm financial performance, followed by human capital efficiency (HCE). Structural capital efficiency (SCE) only helps in enhancing the ROA of Indian firms.The study results are only restricted to the 30 companies of India listed on S&P BSE SENSEX Index. Thus generalization of the result needs especial caution.The study fills the void in the current literature of IC and business performance and extends the understanding of their relationship by providing empirical evidence.]]>
<![CDATA[Independence from the perspective of the Shari'ah committee ]]>
<![CDATA[Nor Hafizah Zainal Abidin]]>;
<![CDATA[Fatimah Mat Yasin]]>;
<![CDATA[Ahmad Zainal Abidin]]>
<![CDATA[ Asian Journal of Accounting Research Volume 6 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-07-2020-0053
<![CDATA[The purpose of this study is to gather the perceptions of the Shari'ah committee members on what and how they safeguard and strengthen their independence in fact and independence in appearance during the discharge of their duties.Data were gathered through semi-structured interviews with 13 Shari'ah committee members from 13 different Islamic financial institutions (IFIs).Based on the Islamic worldview and agency theory, the findings suggest that safeguard measures within the context of the Shari'ah committee are strengthened by the following factors: presence of competencies, personal characteristics of the Shari'ah committee members, board engagement, role of the chairman in the Shari'ah committee and accountability to God. Based on the agency theory, it can be suggested that the characteristics of the Shari'ah committee and the presence of an effective governance structure are able to minimise threats to the independence of the Shari'ah committee and enhance its effectiveness.The insights from this study highlight that proper and fit criteria need to be enhanced to ensure the independence of the Shari'ah committee members when performing their roles for IFIs. Moreover, it shows that board engagement and chairman involvement in overseeing the Shari'ah committee in the discharge of its duties is able to improve the independence of the Shari'ah committee both in fact and in appearance.This study contributes to the evidence on safeguard measures in the Malaysian context, which is highly regulated in relation to the Shari'ah governance practices in IFIs. This evidence could be considered by other Shari'ah committees in different contexts.]]>
<![CDATA[Investigating the relationship between integrated reporting and firm performance in a voluntary disclosure regime: insights from Bangladesh ]]>
<![CDATA[Md. Shafiqul Islam]]>
<![CDATA[ Asian Journal of Accounting Research Volume 6 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-06-2020-0039
<![CDATA[The purpose of this study is observing the disclosure pattern of integrated reporting (IR) and investigating its relationship with a firm's operational, financial and market growth performance measured in the form of return on assets (ROA), return on equity (ROE) and market-to-book value ratio respectively in the voluntary disclosure regime of Bangladesh.This research is quantitative, based on a pooled-OLS regression analysis of 20 firms listed under ten different nonfinancial industries of the Dhaka Stock Exchange (DSE) for three financial years from 2015–2016 to 2017–2018, with 60 firm-year observations. A manual content analysis based on a structured integrated reporting disclosure index (IRDIN) measures the extent of disclosure in the corporate annual reports. The practical model consists of the dependent variable IRDIN and the independent variables ROA, ROE and market-to-book value ratio. The natural logarithm of total assets and financial leverage are the two controlling variables used in the model.The findings deduced from the empirical results indicate that the IRDIN is positively and significantly related to all three performance variables. Content analysis shows an increasing pattern of disclosure of the constructed index elements by the sample firms.A Small sample size may deter the generalization of the research findings in other voluntary disclosure regimes. Self-constructed IRDIN index scores may be affected by subjective judgment while assessing the annual reports.Capital market regulators can gain valuable insights regarding the suitability of implementing IR in Bangladesh as the results show a positive relationship of firm performance with the adoption of this revolutionary paradigm in corporate reporting.This study adds value to the existing limited literature of IR disclosure and firm performance in Bangladesh by incorporating content analysis and regression analysis to understand how firms respond to the demand of value creation by the stakeholders in a voluntary disclosure regime. This study captures sample firms from all the nonfinancial industries of Bangladesh with a unique IR index, which is the first of its kind.]]>
<![CDATA[Revenue diversification and financial sustainability of microfinance institutions ]]>
<![CDATA[Peter Nderitu Githaiga]]>
<![CDATA[ Asian Journal of Accounting Research Volume ahead-of-print Issue ahead-of-print ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-11-2020-0122
<![CDATA[This paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).The study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.The study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.The findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidiesUnlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.]]>
<![CDATA[The influence of audit committee’s and company’s characteristic on intellectual capital disclosure ]]>
<![CDATA[Zahroh Naimah]]>;
<![CDATA[Nico Acintyo Mukti]]>
<![CDATA[ Asian Journal of Accounting Research Volume 4 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-05-2019-0036
<![CDATA[The purpose of this paper is to test the influences of audit committee’s and company’s characteristic on intellectual capital disclosure (ICD) among the LQ45-listed companies in Indonesia Stock Exchange (BEI) between 2013 and 2014.The paper employed multiple linear regression and saturation sample as the analysis methods.The findings showed that size of audit committee does not significantly influence ICD; meeting frequency of audit committee positively influences ICD; and company size does not influence ICD positively. On the other hand, profitability does not significantly influence ICD; leverage has negative and significant influence on ICD; and the type of industry does not significantly influence intellectual capital disclosure.As there are few ICD studies, this research will surely add ICD antecedents to literature.]]>
<![CDATA[Macroeconomic factors, firm characteristics and financial performance ]]>
<![CDATA[Chinedu Francis Egbunike]]>;
<![CDATA[Chinedu Uchenna Okerekeoti]]>
<![CDATA[ Asian Journal of Accounting Research Volume 3 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-09-2018-0029
<![CDATA[The purpose of this paper is to explore the interrelationship between macroeconomic factors, firm characteristics and financial performance of quoted manufacturing firms in Nigeria. Specifically, the study investigates the effect of interest rate, inflation rate, exchange rate and the gross domestic product (GDP) growth rate, while the firm characteristics were size, leverage and liquidity. The dependent variable financial performance is measured as return on assets (ROA).The study used the ex post facto research design. The population comprised all quoted manufacturing firms on the Nigerian Stock Exchange. The sample was restricted to companies in the consumer goods sector, selected using non-probability sampling method. The study used multiple linear regression as the method of validating the hypotheses.The study finds no significant effect for interest rate and exchange rate, but a significant effect for inflation rate and GDP growth rate on ROA. Second, the firm characteristics showed that firm size, leverage and liquidity were significant.The study has implications for regulators and policy makers in formulating policy decisions. In addition, managers may better understand the interplay between macroeconomic factors, firm characteristics and profitability of firms.Few studies have addressed the interplay of macroeconomic factors and firm characteristics in determining the profitability of manufacturing firms in the country and developing countries in general.]]>
<![CDATA[Income smoothing and firm value in a regulated market: the moderating effect of market risk ]]>
<![CDATA[Segun Abogun]]>;
<![CDATA[Ezekiel Aiyenijo Adigbole]]>;
<![CDATA[Titilope Esther Olorede]]>
<![CDATA[ Asian Journal of Accounting Research Volume 6 Issue 3 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-08-2020-0072
<![CDATA[This study aims to examine the impact of income smoothing on the value of firms in a regulated security market, moderated by market risk. This is based on the prevalence of accounting scandals resulting in the collapse of firms which has been attributed to the opportunistic behaviors of managers.The ex post facto research design was employed, and as such, data were gathered from secondary sources. The quantitative approach was also used in the study. Furthermore, the system generalized method of moments (Blundell–Bond) panel estimation technique was used for analyzing the data. Income smoothing was measured using the accrual based methods, while firm value was measured using share price.The study found that income smoothing has a negative significant impact on firm value. The study also revealed that market risk is a significant variable that defines the relationship between income smoothing and firm value.Testing the moderating effect of market risk on the relationship between income smoothing and firm value is unique to this study, particularly from a regulated security market and emerging economy.]]>
<![CDATA[Earnings persistence, earnings power, and equity valuation in consumer goods firms ]]>
<![CDATA[Nurani Fatma]]>;
<![CDATA[Widi Hidayat]]>
<![CDATA[ Asian Journal of Accounting Research Volume 5 Issue 1 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-05-2019-0041
<![CDATA[The purpose of this paper is to examine the influence of earnings persistence and earnings power on equity valuation.The purposive sampling method was applied to determine the samples of selected 100 firms. This study employed secondary data obtained from the annual reports and financial statements of consumer goods firms listed on the Indonesian Stock Exchange for the period 2010–2014. The analysis technique used a multiple regression analysis.The study result shows that, partially, earnings persistence and earnings power affect equity valuation by investors. Earnings persistence has a negative influence, whereas earnings power has a positive influence on equity valuation.This study throws additional lights on equity valuation specific to consumer goods industries.]]>
<![CDATA[Detecting anomalies in financial statements using machine learning algorithm ]]>
<![CDATA[Mark Lokanan]]>;
<![CDATA[Vincent Tran]]>;
<![CDATA[Nam Hoai Vuong]]>
<![CDATA[ Asian Journal of Accounting Research Volume 4 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-09-2018-0032
<![CDATA[The purpose of this paper is to evaluate the possibility of rating the credit worthiness of a firm’s quarterly financial report using a dynamic anomaly detection method.The study uses a data set containing financial statements from Quarter 1 – 2001 to Quarter 4 – 2016 of 937 Vietnamese listed firms. In sum, 24 fundamental financial indices are chosen as control variables. The study employs the Mahalanobis distance to measure the proximity of each data point from the centroid of the distribution to point out the extent of the anomaly.The finding shows that the model is capable of ranking quarterly financial reports in terms of credit worthiness. The execution of the model on all observations also revealed that most financial statements of Vietnamese listed firms are trustworthy, while almost a quarter of them are highly anomalous and questionable.The study faces several limitations, including the availability of genuine accounting data from stock exchanges, the strong assumptions of a simple statistical distribution, the restricted timeframe of financial data and the sensitivity of the thresholds for anomaly levels.The study opens an avenue for ordinary users of financial information to process the data and question the validity of the numbers presented by listed firms. Furthermore, if fraud information is available, similar research can be conducted to examine the tendency for companies with anomalous financial reports to commit fraud.This is the first paper of its kind that attempts to build an anomaly detection model for Vietnamese listed companies.]]>
<![CDATA[Profitability vs Poverty alleviation: has banking logic influences Islamic microfinance institutions? ]]>
<![CDATA[Luqyan Tamanni]]>;
<![CDATA[Mohd Hairul Azrin Haji Besar]]>
<![CDATA[ Asian Journal of Accounting Research Volume 4 Issue 2 ]]>
Publisher : <![CDATA[Emerald Publishing Limited ]]>
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DOI: 10.1108/AJAR-05-2019-0039
<![CDATA[The purpose of this paper is to shed some lights on the process of mission drifting or abandoning poverty objective by Islamic microfinance institutions (IMFs). The paper investigates whether the extensive use of banking logic changes IMFs, from focusing on both development and financial objectives to only considering sustainability as their primary mission.This paper adopts mixed methods by analyzing 7,200 microfinance data from Microfinance Exchange Market and reviewing annual reports and websites of 25 IMFs to examine their vision and mission statements and other related information.The finding shows Islamic microfinance has not changed, despite increasing adoption of financial or banking performance measures. However, size and age of the institutions may affect the outcome in the future. The authors find that smaller microfinance institutions maintain genuine objective to serve the poor, as the grow larger they would be more inclined toward sustainability objectives.The research is limited on the sample size as data on Islamic microfinance globally is limited. However, the paper looked at the global data rather than local data to compensate for this limitation. Future study would be further taking the study through qualitative methods to support the study.This paper aims to shed some lights on the process of mission drifting or abandoning poverty objective by IMFIs. The paper investigates how has the extensive use of financing logic has changed IMFIs from focusing on both development and financial objectives to only considering sustainability as their primary mission. Arun and Hulme (2009) argued that the interaction of multiple logic within microfinance institutions, i.e. financial vs social, could pose some serious management dilemmas within microfinance institutions. Further, commercialization puts pressure on the field staffs to achieve financial targets and often neglect their poverty outreach mission to the poor. The well-known crisis in Andhra Pradesh, India where clients of microfinance institutions committed suicide after being shamed by field officers who tried to collect payments of loans (Mader, 2013; Taylor, 2011), provides a powerful case of the impact of financialization to microfinance clients.]]>
