Department of Accounting and Finance
URI for this collectionhttps://rps.wku.edu.et/handle/123456789/46627
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Item Determinants of Management Accounting Implementation: Evidence From Selected Manufacturing Companies in Ethiopia(wolkite university, 2021-08-06) SHUMET MITKUIn the era of globalization, the world has already been changed in to a small villege. Thus, being able to compete as per the demand of the existing business environment especially for business organizations is mandatory but not alternative choice. In other words, if large business organizations not able to be familiar with MAPs, they will lack power to be competent enough to assure survival. As a result, this research paper is conducte to investigate determinants of MAPs in selected large manufacturing companies in Ethiopia. To do so, the researcher used primary data that was collected from accountants and managers of selected large manufacturing companies in Ethiopia. Since implementation of MAPs increase as size of a company increase, the researcher purposively selected his sample elements from larger companies. Purposive samling was also applied to select directly related respondents out of all of the employees in a selected company. Amharic version of questionnaire was distributed to selected respondents like managers, dupty-managers, financial directors, chief accountants, senior management accountants or chief executives etc. The questionnaire was prepared using a five level likert- scale type and each of the variables in the study were measured using this 5-point Likert scale which is ranged from lowest(“Strongly Disagree”) to highest (“Strongly Agree”) scale. The study used descriptive statistic, multiple linear regression(OLS) and hypothesis testing to get proper output of the study. Size of a company, production technology, strategy of a company, qualification of accounting staffs and intensity of market competition were hypothesized factors to be investigated and all of these proposed determinants were expected to have positive and statistically significant effect on MAPs. It was identified from the analysis that, size of a company and qualification of accounting staff are the two important determinants to affect management accounting practices out of these proposed five determinants. However, production technology, strategy of a company and intensity of market competition were determinants identified not to have statistically significant effect on MAPs. Regression output of the analysis showed that 50.81% of the study is explained by the model and it showed that all of the variables collectively could play crucial role to contribute for MAPs in large companies. Depending on findings of the study, the researcher would like to recommend that all concerned bodies should give attention to improve limitations of MAPs in all leveled Companies as it is important to be familiar with concepts and principles of management acoounting to increase competitiveness of the companies in Ethiopia.Item DETERMINANTS OF FINANCIAL REPORTING QUALITY IN CASE OF INSURANCE COMPANY IN THIOPIA(wolkite university, 2024-05-08) SEYOUM YILMAThis study intends to assess the determinants of financial reporting quality in case of insurance company in Ethiopia over a period of 2014-2022. Consequently, the study used document review of insurances’ audited financial statements. The explanatory variables used in this study were Leverage (LE), Profitability (ROA), Liquidity (LQ), Auditor Change(AC), Firm Age (FA) and Firm Size(FS).In this study sixteen Insurance companies were selected from a total population of sixteen insurances companies to accomplish a study for the period of nine years (2014-2022) with the total of 144 observations. Moreover, The secondary data were analyzed using descriptive statistics, correlation analysis and panel data analysis and data from document reviews were interpreted quantitatively. The study used panel data and random regression model to analyze the Determinants of Financial Reporting quality of Ethiopian insurance companies. The study found that profitability ratio has positive and insignificant effect on financial reporting quality. While, auditor changes and firm ages had significant effect on financial reporting quality, leverage and liquidity were found to be insignificant effect on financial reporting quality of Ethiopian insurance companiesItem SCHOOL OF GRADUATE STUDIES THE EFFECT OF FINANCIAL INNOVATION ON PROFITABLITY OF ETHIOPIAN COMMERCIAL BANKS(wolkite university, 2024-05-08) SELAM TADEMUFinancial innovation is considered to be a critical requirement for the growth and profitability of organizations. It enhances technological provisions, product constituents, integrated software and consumer friendly as well as incorporating additional1useful features. The aim of this study was to examine the effect of financial innovations on profitability of commercial banks in Ethiopia. The researcher used exploratory research design and quantitative research approach was used. The independent variables were mobile banking user, internet banking user, agent banking, ATM machine, pos machine and dependent variable was profitability. Beside these, in the study firm size and bank age were used as control variables. The study uses only secondary source of data. The pooled regression model was used to analyze the relationship between financial innovation and profitability. Agent banking; age of the firm and bank size has positive and significant effect on return on equity while, ATM and posm has negative statistically significant effect on ROE. Only mobile banking has positive and significant effect on ROA while other has negative and significant effect on ROA except mobile banking. Moreover, pos and mobile banking has positive and significant effect on profitability that were measured in NIM while the remaining other variables has negative and significant effect on profitability (NIM). From the study, it can be concluded that investment and asset in pos machine terminal has negative and statistically significant impact on ROE and ROA. The asset of pos machine terminal has positive and significant impact on net interest margin. The asset of mobile banking increase profitability (NIM). From the findings it can be conclude that, the investment on internet banking has Positive effect on banks performance that was measured by ROE. The greater investment on ATMs deployment has negative effect on banks profitability and investment on deploying ATMS lead to increase banks performance.Item DETERMINANTS OF INTERNAL AUDIT EFFECTIVENESS IN SELECTED GOVERNMENT UNIVERSITIES OF ETHIOPIA(wolkite university, 2020-06-06) SEIFU SHIGAZE SHEMBIRThe increasing rate of financial irregularities, fraud, and mismanagement in Ethiopian Government Universities calls for concern. Despite all control measures put in place by the government, coordinating and regulating agencies, lack of transparency and accountability continues strongly. The objective of this study was to assess determinants of the effectiveness of internal audit in selected government universities of Ethiopia. The study employed explanatory survey research design along with both quantitative and qualitative approaches. Purposive sampling technique was used to select ten universities, 4 from the first generation; 3 from the second generation; and 3 from the third generation, from the total of 44 universities. Primary data have been used using self – administered questionnaires for 95 internal audit staffs, 45 middle level and 36 top level managements and semi – structured interview for 7 internal audit directorate directors. A total of 183 respondents were participated in the study. Secondary source of data also used by reviewing documents related to internal audit functions. Descriptive statistics and multiple linear regression model were used to analyze the quantitative data to examine the effect and relationship between IA effectiveness and six determinant factors of IA effectiveness. All the quantitative data was analyzed using a Statistical Package for Social Sciences (SPSS) version 20.The findings of the study revealed that among the four significant factors: independence of internal auditors, competency of internal auditors, internal audit work quality and organizational setting; independence of internal auditors was the most dominant determinant factor for the effectiveness of internal audit. However, 73.5% of the variations in the effectiveness of the internal audit of the universities were jointly accounted by the six variables including management support and perception of managements towards internal audit work value. Therefore, the effectiveness of internal audit in government universities is under question, unless these determinant factors are appropriately pledged. Thus, this study suggests that concerned bodies on government universities have to give attention on the development of internal auditors to be hired at the university level or should arrange ways so that the existing internal auditors in the universities to have continuous professional development.Item DETERMINANTS OF INTERNAL AUDIT EFFECTIVENESS IN SELECTED GOVERNMENT UNIVERSITIES OF ETHIOPIA(wolkite university, 2020-05-07) SEIFU SHIGAZE SHEMBIRThe increasing rate of financial irregularities, fraud, and mismanagement in Ethiopian Government Universities calls for concern. Despite all control measures put in place by the government, coordinating and regulating agencies, lack of transparency and accountability continues strongly. The objective of this study was to assess determinants of the effectiveness of internal audit in selected government universities of Ethiopia. The study employed explanatory survey research design along with both quantitative and qualitative approaches. Purposive sampling technique was used to select ten universities, 4 from the first generation; 3 from the second generation; and 3 from the third generation, from the total of 44 universities. Primary data have been used using self – administered questionnaires for 95 internal audit staffs, 45 middle level and 36 top level managements and semi – structured interview for 7 internal audit directorate directors. A total of 183 respondents were participated in the study. Secondary source of data also used by reviewing documents related to internal audit functions. Descriptive statistics and multiple linear regression model were used to analyze the quantitative data to examine the effect and relationship between IA effectiveness and six determinant factors of IA effectiveness. All the quantitative data was analyzed using a Statistical Package for Social Sciences (SPSS) version 20.The findings of the study revealed that among the four significant factors: independence of internal auditors, competency of internal auditors, internal audit work quality and organizational setting; independence of internal auditors was the most dominant determinant factor for the effectiveness of internal audit. However, 73.5% of the variations in the effectiveness of the internal audit of the universities were jointly accounted by the six variables including management support and perception of managements towards internal audit work value. Therefore, the effectiveness of internal audit in government universities is under question, unless these determinant factors are appropriately pledged. Thus, this study suggests that concerned bodies on government universities have to give attention on the development of internal auditors to be hired at the university level or should arrange ways so that the existing internal auditors in the universities to have continuous professional development.Item FACTORS AFFECTING THE QUALITY OF EXTERNAL AUDIT SERVICE: EVIDENCE FROM PRIVATE AUDIT FIRMS OF ETHIOPIA(wolkite university, 2024-04-05) SEADA MOHAMMEDThis research delves into the determinants influencing external audit quality in Ethiopian private audit firms, concentrating on five pivotal dimensions of auditors' professional ethics: independence, competence, objectivity, integrity, and confidentiality of information. The study, encompassing 120 private audit firms, adopts a mixed research methodology and employs ordinal logistic regression to analyze the intricate relationships between these ethical dimensions and the perceived Quality The researcher was employed a quantitative research method which allows gathering numerical data, measuring variables, predicting and using statistical procedures. To determine the relationship among the variables and to test the research hypothesis correlation and regression analysis method was used by meeting the ordinary least square (OLS) assumptions of the linear regression. The correlation analysis revealed significant positive associations between auditor competence, integrity, objectivity, confidentiality of information, and the overall external audit quality. The model's robust fit, with an 88.4% explanation of variability in external audit quality, underscored the effectiveness of the selected determinants in predicting audit outcomes. Multiple linear regression analysis identifies competence and integrity as substantial predictors of external audit quality, supported by robust methodology as indicated by high R-square values and adherence to assumptions. In conclusion, this research highlights the crucial roles of auditor competence and integrity in external audit quality in Ethiopian private audit firms. While auditor independence showed no significant correlation, the study emphasizes context-specific factors. It offers valuable insights and practical recommendations for improving audit practices. Implementing these can enhance audit quality and the integrity of the profession in Ethiopia. The study recommended targeted improvements in auditor competence and integrity to enhance overall external audit quality in Ethiopia. Acknowledging limitations such as a focused scope and methodological constraints, 6 the research underscores the need for cautious interpretation of results while offering valuable insights for the improvement of auditing practices in the Ethiopian private sector.Item CORPORATE GOVERNANCE AND ITS IMPACT ON PERFORMANCE (SOCIAL AND FINANCIAL): EVIDENCE FROM MFIs IN ETHIOPIA(wolkite university, 2021-06-05) SANI NISRANE MOHAMMEDThe study was aimed to look at the effect of corporate governance attributes on the social and financial performance of in MFIs Ethiopia. Explanatory research design with quantitative research approach was employed to carry out the study. From 35 legally registered microfinance institutions at NBE and AEMFIs, 16MFIs were selected based on the availability of data to investigate the effect of corporate governance variables such as board size, board educational qualification, board experience in the financial sector, meeting frequency of the board, board audit committee size and CEO with dual responsibility on social (breath of outreach and depth of outreach) and financial performance of MFIs measured by Number of Active Borrowers, Gross Loan Portfolio and Return on Asset respectively. In addition to main explanatory variables, control variables MFIs Size were also included within the study variables. Both primary and secondary data were used in which primary data regarding board characteristics was collected through questionnaire and secondary data was obtained from MFIs, NBE and AEMFIs. Panel data covering six year from 2014-2019 was analyzed for sixteen microfinance institutions. The regression results revealed that board size, board educational qualification, meeting frequency and CEO with dual responsibility have positive relationship with financial performance of MFIs while board experience in the financial sector, board audit committee size and firm size has statistically negative relationship. Board educational qualification, meeting frequency, audit committee size and firm size have positive relationship with social (breath of outreach) while board size, board experience in the financial sector, and CEO with dual responsibility have negative relationship. Board size, Board educational qualification, audit committee size and firm size have positive relationship with social (depth of outreach) while board experience in the financial sector, meeting frequency and CEO with dual responsibility have negative relationship. Based on empirical result of the study, it is recommended that CEO with dual responsibility should be separate for better performance. Furthermore, in order to reduce the problem of management failures which put at risk the money obtained from the public and other sources, the governance mechanisms of MFIs have to be effective (i.e. creating and maintaining a business environment that motivates managers and entrepreneurs to maximize firm’s operational efficiency, returns on investment and or on equity and long term productivity).Item THE EFFECT OF CAPITAL STRUCTURE ON PROFITABLITY OF COMMERCIAL BANKS IN ETHIOPIA(wolkite university, 2024-05-08) SALIH JEMAL REDIThis study investigates the effect of capital structure on the profitability of commercial banks in Ethiopia. The primary objective is to examine the relationship between various measures of capital structure, including debt-to-equity ratio, debt-to-asset ratio, and interest coverage ratio, and the profitability of core business operations of Ethiopian commercial banks. To achieve this objective, a quantitative research approach is employed, utilizing panel data from 16 commercial banks operating in Ethiopia from 2014 to 2023. The data is analyzed using descriptive statistics, multiple regression analysis, and diagnostic tests to assess the validity of the model assumptions. After the raw were collected and processed, results were computed, analyzed and presented using panel data analysis, descriptive statistics and correlation analysis methods and fixed effect regression output model. The fixed-effects model is selected based on the results of the Hausman specification test. The findings reveal several significant relationships between capital structure variables and bank profitability. Specifically, the debt-to equity ratio, debt-to-asset ratio, and loan-to-deposit ratio exhibit statistically significant effects on bank profitability, with positive coefficients indicating a positive relationship. Conversely, interest coverage ratio and bank size demonstrate negative relationships with profitability. Moreover, growth appears to have a negative impact on profitability, suggesting that rapidly growing banks may face challenges in maintaining profitability amid expansion efforts. Based on these results, recommendations are made to Ethiopian commercial banks to carefully manage their capital structure, focusing on optimizing debt levels and ensuring adequate interest coverage to enhance profitability. Additionally, banks are advised to consider the implications of their growth strategies on profitability and to prioritize efficiency and risk management in their operations. Overall, this study contributes to the existing literature by providing empirical evidence on the relationship between capital structure and profitability in the context of Ethiopian commercial banks, offering insights that can inform strategic decision-making and improve financial performance in the banking sector.Item FACTORS AFFECTING COMMITTING OF ACCOUNTING FRAUD IN PUBLIC AND PRIVATE BANKS IN WOLKITE TOWN OF GURAGE ZONE, ETHIOPIA(wolkite university, 2019-08-09) YALEW KIBRU SHIRGAA study entitled factors affecting committing of accounting fraud in public and private banks in Wolkite town of Gurage zone, Ethiopia was conducted with the aim of identifying the types of accounting frauds committed and identifying major motivating factors for employees responsible for committing accounting frauds. Data for this study were collected using a semi-structured questionnaire. Both descriptive and econometric methods of data analysis were used for analysing data. Multiple linear regression model as part of the econometric analysis was used to analyse and identify factors affecting committing of accounting fraud in bank. The result of descriptive analysis showed that employees in bank are forced to commit frauds because of the motivation, the opportunity they accessed and rationalization. The result of econometric analysis also revealed that variables namely adherence to accounting rules, internal control effectiveness management morality, information asymmetry, and suitability of the motivational rewarding system were found to significantly determine the commitment of accounting fraud in private and public banks in the study area. The study finally recommended that limiting employees’ access to only the assets, systems, and information necessary for them, keeping in the morality of management, providing different incentive and compensation mechanisms, strengthening the internal bank controlling systems, communicating the employees in a bank with uniform information, and improving awareness of the employees to obey for the accounting rules for minimizing the accounting fraud in private and public banks.Item EFFECT OF LOAN PORTFOLIOS ON FINANCIAL PROFITABILITY OF COMMERCIAL BANKS IN ETHIOPIA PANEL ANALYSIS(wolkite university, 2021-05-07) REDWAN ABAGARO ALIEBanks play very significant role in the economies of the nation. The well-being of the economy is highly related to the soundness of its banking system. Loans comprise the single largest asset for commercial banks. The purpose of this study is to investigate the effect of loan portfolio on the financial profitability of commercial banks in Ethiopia. To achieve this objective explanatory research design with a quantitative approach was used. The study fully employed strongly balanced panel data from the period 2011-2020. Collocated data from 12 commercial banks audited financial statement purposively and by using Eviews-9 software packages analyzed through panel data regression analysis methods. The study employed a random-effect model as confirmed by the Hausman test. The study found that loan portfolio growth (LPG) and loan portfolio profitability (LPP) have statistically significant and a positive effect on commercial banks‘ financial profitability measured by ROA, ROE and NIM. Whereas, loan portfolio operational efficiency (LPOE) and loan portfolio asset quality (LPAQ) has a positive and statistically insignificant effect on Commercial banks‘ financial performance. That is LPAQ, LPG, LPOE and LPP are jointly explaining 58.35%, 65.46% and 53.4% of the change in ROA ROE and NIM respectively The researcher recommended that to increase loan portfolio asset quality (LPAQ) the bank has to revise and the fill gap of Credit Policy & Procedures within a short period of time and also to establish strong follow up mechanism to insure strict adherence to the Policy and Procedure