International Journal of Accounting & Finance Review 2021-04-21T18:06:03+00:00 Managing Editorial Board Open Journal Systems International Journal of Accounting & Finance Review (IJAFR),Accounting & Finance Review,Accounting, Finance LEGAL AUDIT QUALITY AND FRAUD RISK: THE CASE OF TUNISIAN LISTED COMPANIES 2021-03-25T15:09:56+00:00 Azhaar Lajmi Wided Khiari Oumaima Ouertani <p style="text-align: justify;"><em>The aim of this study is to examine the impact of legal audit quality on the likelihood of accounting fraud, for a sample of 48 companies listed on the Tunisian stock market over the period between 2014 and 2018. Based on the logit panel regression, we have shown that the audit firm's membership in one of the Big networks and the rotation of external auditors are two major determinants in the reduction of cases of fraud in Tunisian companies. In addition, the results showed that joint audit deteriorates the quality of auditing and thus increases the risk of fraud. This study provides new insights in terms of legal audit and fraud risk in the Tunisian context based on the econometrics of panel data, which is a valuable method to measure the impact of several actions alone or simultaneously. It has allowed us to analyze the behaviors of companies by considering the effect of many proxies of legal audit quality.</em></p> <p><strong>JEL Classification Codes: </strong>G32, M42, C23.</p> 2021-03-25T14:46:19+00:00 ##submission.copyrightStatement## A STUDY ON IMPACT OF BEHAVIOURAL FINANCE ON INVESTMENT DECISION OF SINGLE PARENTS IN SOUTH ASIAN COUNTRIES 2021-03-25T18:02:37+00:00 Kannadas Sendilvelu Manita Deepak Shah <p><em>The purpose of this study is to find out the possible impact of behavioural finance on the investment decision of a single parent. As being an earning/working single parent who usually does not have other possible sources in their family, the decision which they take must be a reliable one and cannot afford to get a second chance. In the study, </em><em>this study is also one of an effort to assess the impact of behavioural biases in the investment decision-making of a single parent. A questionnaire is designed and responses are collected from 203 respondents who prefer to invest where the level of risk is either low or moderate and are more concerned about losses in their investment than substantial gain. Also, most of the respondents were investing in order to meet some specific purpose, for their retirement plan as well as to educate their children. This study concludes by stating that investors’ risk-taking capacity is dependent on their level of income and the sources of income. Although every Individual is subject to some biases, they tend to think more rational way than an average investor in many ways as they know about their requirements and the investment they make.</em></p> <p><strong>JEL Classification Codes:</strong> G40, G41.</p> 2021-03-25T17:48:52+00:00 ##submission.copyrightStatement## IMPACT OF CORPORATE GOVERNANCE FAILURE ON PUBLIC TRUST: AN EVIDENCE FROM INDIA 2021-04-04T09:33:33+00:00 Gagan Kukreja <p><em>This research study explores the maligned role of Chanda Kochhar, the top-notch executive of ICICI Bank, a leading multinational and financial service provider. An alleged corruption case was filed against her under the Prevention of Money Laundering Act. The case was filed against her after a whistleblower alleged that the bank had given INR 32.50 billion to Videocon group in 2012, the majority of which was declared as Non- Performing Assets later by the bank. This research study focuses on misused the position for personal gains. It touches upon the board of directors of an organisation's fiduciary role and tries to outline whistleblowers’ importance in corporate governance. The study unravels the conflicts of interest, alleged corruption, lack of disclosures of related party transactions required by corporate governance principles, and quid-pro-quo. The study will deliberate the impact of such alleged corruption on the various stakeholders, especially shareholders. The study is exploratory and qualitative and based on publicly available information. Other corroborative evidence verifies the reliability of the information. This study will offer suggestions to improve the corporate governance principles to the regulators. </em></p> <p><strong>JEL Classification Codes: </strong>D73, D74, G21, G34.</p> 2021-04-04T09:22:29+00:00 ##submission.copyrightStatement## A PROPOSED ARCHIVAL EMPIRICAL RESEARCH METHODOLOGY TO TEST RELIABITIY AND VALIDITY OF DISCOUNTED RESIDUAL INCOME MODEL 2021-04-06T10:22:12+00:00 Min Shirley Liu <p><em>Kerlinger and Lee (2000) defines reliability as “the proportion of the ‘true’ variance to the total obtained variance of the data yielded by a measuring instrument” and content validity as “representativeness or sampling adequacy of the content—the substance, the matter, the topic of measuring instrument”. The goal of this research is to provide an empirical research method to quantify the reliability and validity of residual income model in the prediction of the value of equity (stock price), by proposing to compare all active U.S. firms from 1981 to 2005 traded in the NYSE and the AMEX (the time period and listed stocks are subject to change based upon the availability of data from different sources). </em></p> <p><strong>JEL Classification Codes</strong>: G10, G17, M41, Z10.</p> 2021-04-06T10:21:18+00:00 ##submission.copyrightStatement## IMPACT OF INFORMATION TECHNOLOGY AND DIGITALIZATION ON BANKING STRATEGY PRE-COVID-19, CHALLENGES IN THE COVID ERA AND POST-COVID STAKES 2021-04-09T15:33:50+00:00 Syrine Ben Romdhane <p><em>The spread of information technology and the digitalization of financial services raise a range of theoretical questions as the structures of the banking industry undergo change. This change has intensified with the impact of the COVID-19 pandemic which is already being observed. The purpose of this study is therefore threefold: (1) to analyze the impact of IT and the digitalization of financial services on the strategy and functioning of the pre-COVID-19 banking sector; (2) to study the challenges banks are facing in the COVID era in managing the crisis, and (3) to highlight post-COVID stakes. &nbsp;This study shows, on the one hand, that the crisis confirms the need for banks to combine physical proximity and digital offer, and on the other hand, that digitalization could be the solution for banks to consistently mitigate risks. Through this digital transformation and their ability to re-invent themselves, the banks would guard against potential similar crises. By adopting a more digitized and open behavior, they would be immune to such crises because they would have appropriate strategic plans, as they would be better equipped to counter the threats and better prepared to transform them into opportunities.</em></p> <p><strong>JEL Classification Codes:</strong> B26, B41, G21, G32, O32.</p> 2021-04-09T15:31:56+00:00 ##submission.copyrightStatement## A REVIEW AND CRITIQUE OF COMMANDER THEORY 2021-04-16T10:42:21+00:00 Il-woon Kim Phillip C. James <p><em>The development of accounting was marked by three key theories namely: the proprietary theory, the entity theory and the fund theory. The commander theory was subsequently introduced to address the criticisms of the previous theories. This paper, therefore, outlines the history and development of the commander theory, it also outlines the essence of the theory and discusses general criticisms levied against it.&nbsp; Despite some apparent weaknesses of the commander theory, one of which is that it is in-ward focused, there-by ignoring those outside the firm, it is simultaneously argued that the commander theory should be viewed as a significant theoretical framework in the formulation of accounting standards.</em></p> <p><strong>JEL Classification Codes: </strong>M41.</p> 2021-04-16T10:40:31+00:00 ##submission.copyrightStatement## OPTIMIZING BALANCE SHEET FOR BANKS IN INDIA USING GOAL PROGRAMMING 2021-04-16T11:09:34+00:00 Jyoti Tanwar Arun Kumar Vaish NVM Rao <p><em>In earlier years, there was abundance of funds in banks in the form of demand and savings deposits. Hence, the focus of banks was mainly on asset management. But intense competition and volatility of interest rate due to banking reforms reduced the availability of low-cost funds and therefore, banks focused on liability management as well. These pressures call for structured and comprehensive measures and not just ad hoc action. This is how banks started to concentrate more on the management of both sides of the balance sheet. </em><em>As a result, the concept of asset-liability management originated in India and introduced in the Indian banking industry since 1st April 1999 to administer the risk management aspects. This paper attempts to optimize assets and liabilities of banks using goal programming technique. Secondary data is collected from annual reports of Allahabad bank from 2010-2019 and RBI website is used for modelling. The findings show that in Allahabad bank, goal programming help in achieving optimization and increase profitability. The model incorporating constraints and set objectives. It model can support banks in decision making process, planning, budgeting, and forecasting. An attempt is made to use realistic goals and constraints after discussing with bank officials.</em></p> <p><strong>JEL Classification Codes:</strong> C61, G21, G32.</p> 2021-04-16T11:03:54+00:00 ##submission.copyrightStatement## HOUSING FINANCE: IMPACT OF HEAVY INTEREST INCOME TAX 2021-04-21T10:48:10+00:00 Igor Semenenko Jun Wook Yoo <p><em>Heavy taxation of interest income becomes a structural driver of property prices in a low-interest-rate environment. Inflation-adjusted price appreciation in 1996-2017 is approximately 200 basis points higher in 14 countries allowing no exemptions on interest income than in 37 countries that tax interest income at favorable rates or provide exemptions. Results for average returns over long-term periods are confirmed in models with annual frequencies, city-level data, and in a sample of 39 OECD countries for which price/rent ratios are available. It appears that investors view direct real estate, a heavily tax-favored asset, as an inflation hedge and/or alternative to fixed income asset. Higher interest income taxation may be fueling demand for direct real estate investments by retail investors. Separately, my empirical findings suggest that easy monetary policy effects can be magnified through the housing channel in countries that do not allow exemptions on interest income. Consequently, we should expect larger investment misallocations due to asset prices departure from fundamentals in some geographies. </em></p> <p><strong>JEL Classification Codes: </strong>E3, E4, F3, G1, G5, H2.</p> 2021-04-21T10:43:37+00:00 ##submission.copyrightStatement## A CRITIQUE ON LEASE VERSUS BUY ANALYSIS AND GOVERNMENT TAX REVENUE 2021-04-21T18:06:03+00:00 Guan Jun Wang <p><em>Motivation for leasing is often believed to be the tax rate difference between the lessee and the lessor, allowing both to save on taxes at the government's expense. These short notes challenge this conventional wisdom and demonstrate not only the tax rate difference but also other various leasing parameters that can have an impact on government tax revenue both analytically and numerically. This paper adds additional theoretical groundworks to the literature to support the claim that the positive-sum games do exist among the lessee, the lessor, and the government. </em></p> <p><strong>JEL Classification Codes: </strong>C6, G3.</p> 2021-04-21T18:04:43+00:00 ##submission.copyrightStatement##