International Journal of Accounting & Finance Review 2021-07-20T17:55:35+00:00 Editor-in-Chief Open Journal Systems International Journal of Accounting & Finance Review (IJAFR),Accounting & Finance Review,Accounting, Finance POST‐IPO OPERATING PERFORMANCE IN BANGLADESH 2021-05-29T18:57:15+00:00 Md. Sajib Hossain Muhammad Saifuddin Khan <p style="text-align: justify;"><em>This study attempts to investigate the change in the operating performance of firms as they go from private to public ownership. Using the data of all the non-financial firms, which floated initial public offerings (IPOs) from 2008 to 2015, this study finds that there is a significant decline in operating performance as measured by ROA, asset turnover, ROS, and OCFTA after the IPO and the decline continues for next two to three years with the highest deterioration of operating performance being observed in the immediate next year of IPO. Moreover, when the study uses age, debt ratio, sales, capital expenditure, and IPO event to explain the variation of the operating performance of IPO firms over time, it finds that IPO event negatively affects all measures of operating performance. Finally, the study finds that deterioration of the post-IPO operating performance is more pronounced for firms offering their securities with premium than firms offering securities without premium. </em></p> <p><strong>JEL Classification Codes: </strong>G11, G12, G32.</p> <p>&nbsp;</p> 2021-05-29T18:55:25+00:00 ##submission.copyrightStatement## PREDICTING THE EFFICIENCY OF COMMERCIAL BANKS IN BANGLADESH 2021-06-07T16:42:09+00:00 Md. Golam Solaiman Md. Shahnur Azad Chowdhury Basharat Hossain Sultana Akter Md. Kazi Golam Azam <p style="text-align: justify;"><em>This paper examines the efficiency of the thirty-six commercial banks (27 Domestic and 9 Foreign Banks) by reviewing Literature and analyzing 6 years (2011-2016) data. The sample was selected based on the availability of data.&nbsp; It is assumed that the banking sector complies with the variable returns to scale (VRS) approach which means the output of a bank is not proportionately related to its inputs. Therefore, VRS in the ‘Data Envelop Analysis (DEA)’ technique has been employed in this paper. The findings reveal that most (30 banks out of 36 banks) of the banks of Bangladesh are inefficient in terms of technical, allocative, and scale efficiency during the 2011-2016 periods. Conversely, only six banks (4 domestic banks and 2 foreign banks) were found efficient in overall scores in this scrutinization. This study did not find any single bank as efficient in all categories (allocative efficiency, technical efficiency, pure efficiency ratio) for the whole study period (2011-2016). This paper provides valuable intuition, analysis, and comments to the managers and policymakers of the bank’s efficiency score so that they comprehend their position. Finally, this paper suggests necessary steps to transform the inefficient banks into efficient banks, and to make stable the banking sector of Bangladesh.</em></p> <p><strong>JEL Classification Codes: </strong>E51, G21, M1.</p> <p>&nbsp;</p> 2021-06-07T16:40:59+00:00 ##submission.copyrightStatement## CAUSALITY AND COINTEGRATION AMONG STOCK MARKET INDICES: A STUDY OF DEVELOPED MARKETS WITH SENSEX 2021-06-11T14:27:59+00:00 Nisarg A Joshi Dhyani Mehta Bhavesh Patel Nikunj Patel <p style="text-align: justify;"><em>The aim of this paper is to examine the existence of degree of interdependence between Sensex and various stock markets of the American and European regions. The study attempts to analyse the dynamic interactions among 22 global indices. The daily closing prices of indices were obtained from the respective stock exchange websites from January 2005 to May 2018. &nbsp;The normality, stationarity, and causality of the time series were evaluated in the first section using statistical techniques such as the Jarque-Bera statistic, ADF test, and Granger Causality test. The second part of the approach focused on analysing the interdependencies of various stock markets, determining the degree of association, and measuring market efficiency using techniques such as Johansen's Cointegration test, Cross-Correlation test, and Hurst Exponent. The results indicate that there is a significant amount of interdependence between stock markets. It was also observed that there is an association between markets. This study also found bi-directional as well as uni-directional causality among the stock market indices. The study found that interdependence of markets leads to improvements in short-term as well as long-term returns/gains for investors possibly due to international portfolio diversification if there are stronger co-movements of prices across the markets.</em></p> <p><strong>JEL Classification Codes:</strong> G15, F15, F21.</p> <p><strong>&nbsp;</strong></p> 2021-06-11T07:22:09+00:00 ##submission.copyrightStatement## AUDIT COMMITTEE CHAIR CHARACTERISTICS, AND AUDITOR DISMISSAL IN A GOING CONCERN CONTEXT 2021-06-25T15:25:38+00:00 Assma M. Sawani <p><em>This study examines the role audit committee chair expertise may play in fostering audit quality. The 2002 Sarbanes–Oxley Act (SOX) was enacted to strengthen corporate governance practices in the United States; a fundamental part of this act addressed the audit committee structure and composition. Existing literature suggests that audit committee expertise may improve audit quality. In this study I use a logistic model to compare audit committee chair expertise characteristics for first-time going concern opinion firms that dismissed and did not dismiss the auditor after receiving the going concern opinion for the years 2008-2016 with that of firms that received clean opinions and dismissed or did not dismiss the auditor. I find that audit committee chairs with financial expertise, audit expertise, governance expertise and industry expertise are negatively associated with auditor dismissal. This suggests that firms with these audit committee chair expertise profiles may facilitate better audit quality. Moreover, the chair’s audit expertise, industry expertise and financial expertise are differentially significant in the going concern context indicating that these expertise types may temper management’s inclination to dismiss auditors after undesirable opinions. </em></p> <p><strong>JEL Classification Codes:</strong> M41, M42, M49.</p> 2021-06-25T15:25:30+00:00 ##submission.copyrightStatement## THE COST OF INNOVATION: EVIDENCE FROM AUDITOR PRICING OF INVENTOR CHIEF EXECUTIVE OFFICERS 2021-06-30T15:59:27+00:00 Ibrahim Bostan Yezen H. Kannan <p><em>The study assesses whether auditors factor into their pricing of an audit engagement the presence of an inventor CEO given the potential conflict of interest this may present. Empirical and anecdotal evidence suggests that inventor CEOs may have more appetite for risk and may be less business-minded, thus suggesting potential agency costs for the firm. We rely on a self-developed database of inventor CEOs and archival data from other sources. Using multivariate regressions, we assess the association between the presence of an inventor CEO and audit fees, while controlling for audit fee determinants. The results of our analysis reveal that auditors assess a fee premium in the presence of inventor CEOs. Additional analysis also finds that this fee premium is not exacerbated by the presence of audit risk, and the engagement of top-tier auditors significantly reduces auditor pricing of the presence of an inventor CEO. Our analysis also shows that the positive and significant association between audit fees and the presence of an inventor CEO is significantly stronger in the presence of greater financial distress. Overall, our findings suggest that auditors factor into their pricing decision the potential conflict of interest between CEO inventor managers and shareholders.</em></p> <p><strong>JEL Classification Codes:</strong> M42, J2, O32.</p> 2021-06-30T15:59:19+00:00 ##submission.copyrightStatement## THE EFFECT OF FINANCIAL LEVERAGE ON PROFITABILITY: AN EMPIRICAL ANALYSIS OF RECAPITALIZED BANKS IN GHANA 2021-07-20T17:55:35+00:00 Alhassan Bunyaminu Ibrahim Nandom Yakubu Shani Bashiru <p><em>In this study, we examine the impact of financial leverage on profitability of recapitalized banks in Ghana over the period 2008-2017. Based on the random effects and fixed effects estimation strategies, our findings reveal that leverage exerts a significant negative effect on banks’ profits regardless of the proxy of profitability. This provides empirical support for the pecking order theory. The results also establish that bank size positively and significantly enhances profitability. In light of our findings, we conclude that financial leverage is detrimental to banks' profit growth in Ghana.</em></p> <p><strong>JEL Classification Codes:</strong> G21, G30.</p> 2021-07-20T00:00:00+00:00 ##submission.copyrightStatement##