April'21
Welcome to The IUP Journal of Accounting Research and Audit Practices
Focus
Different approaches to learning incorporate emotional, behavioral and cognitive self-regulation for the person, which ultimately supports the development of the required skills. These learning approaches with special reference to accounting education from the base of the first paper, "Learning Approaches and Styles in Accounting Education: A Literature Review", authored by Nana Adwoa Anokye Effah, Octavia Ama Serwaa Otchere and Bright Owusu. The authors have considered selected journals from which various articles published on learning approaches in accounting education have been picked and analyzed comparatively. The study finds that learning is impacted by several factors, and suggests that a widened measurement basis is required to ensure accurate assessments of learning habits.
Financial analysis is important for businesses to understand the measures of a company's success from the perspective of bankers or investors or any outside analyst. It also helps the finance manager in assessing the operational efficiency and managerial effectiveness of the company, apart from the financial strengths and weaknesses or the creditworthiness of the company. Taking these points as the base, Aditya Anand Lanjewar and Rohit Bansal, the authors of the second paper, "A Comparative Analysis of the Financial Ratios of Oil and Gas Companies", identified five prominent firms in the oil and gas sector for the analysis. They performed financial analysis to measure the performance of these firms using various ratios like liquidity ratios, profitability ratios, turnover ratios and leverage ratios along with du-pont analysis. The authors have also provided some suggestions to the managers of the firms for improving the firm's financial health in the long run.
Volatility in the price of a security is measured by calculating the standard deviation of the annualized returns over a period of time. ARCH and GARCH models have become important tools in the analysis of time series data, and are especially useful to analyze and forecast volatility. Based on this, Neeti Mathur, Himanshu Mathur and Satish Chandra Tiwari, authors of the third paper, "Application of GARCH Models for Volatility Modeling of Stock Market Returns: Evidence from Indian Stock Exchange", have analyzed the volatility concerning the Bombay Stock Exchange using the ARCH and GARCH family models. They find a significant explanatory impact of the news about previous volatility on the current volatility. However, no evidence has been found by the authors for the residual ARCH effects.
If the proportion of debt in the capital structure increases above a certain level, the additional cost of debt enforces a firm to face a higher bankruptcy cost, higher financial distress problem and more conflict between shareholders and debt holders, ultimately damaging the firm's performance. Thus, capital structure decisions and financial performance of the firm share a direct relationship, enhancing the agency problem in the firm. Based on this theory, Vibha Tripathi, author of the fourth paper, "Capital Structure, Financial Performance and Agency Theory in the Automobile Industry in India", investigates the interrelationship between capital structure and financial performance in the backdrop of the agency problem of select automobile firms. She finds a negative relationship between debt equity ratio and financial performance and concludes that this negative relation signals agency problem between the firm's equity investors and debt holders. She suggests that caution needs to be exercised by managers of such firms in accepting risky projects as they tend to increase the probability of financial distress, thus passing on the burden to the debt holders.
Consulting Editor
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| Article | Price (₹) | ||
| Learning Approaches and Styles in Accounting Education: A Literature Review |
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| A Comparative Analysis of the Financial Ratios of Oil and Gas Companies |
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| Application of GARCH Models for Volatility Modeling of Stock Market Returns: Evidence from Indian Stock Exchange |
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| Capital Structure, Financial Performance and Agency Theory in the Automobile Industry in India |
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Learning Approaches and Styles in Accounting Education: A Literature Review.
Human learning is a continuous process that equips with knowledge in every field of study. As such, to ensure that the purpose for learning is attained, much attention must be given to the learning process. The paper provides an extensive general review of accounting education developments concerning learning approaches, learning styles, theories of learning and learning outcomes in determining the most appropriate and suitable learning approach students need to adopt to make accounting education effective. The study uses some selected journal articles from Accounting Education, Journal of Education for Business, Journal of Accounting Education and other related articles published during the period 1985-2020 to conduct the review. The study finds that learning is impacted by several factors apart from the relatively fixed learning styles people might have and individual approaches to learning due to diversity in learning environments. The paper suggests that while the quantitative analyses of learning approaches and outcomes far outweigh the qualitative and mixed-method approaches, a lot must be done to widen the measurement basis to ensure accurate assessments of learning habits. The results and discussion of the analyses suggest that every stakeholder in accounting education has a role to play in improving learning in the accounting curricula.
A Comparative Analysis of the Financial Ratios of Oil and Gas Companies
In today's world scenario, oil and gas sector is an important area. In a highly competitive business field, most financial statement analyses focus on industries. The paper shows a comparative financial performance of the Hindustan Oil Exploration Company, Jindal Exploration Industries Ltd., Selan Exploration Technologies, South West Pinnacle Exploration and SVOGL Oil and Gas Energy during 2015-2019. Ratios like liquidity ratio, profitability ratio, turnover ratio and leverage ratio have been used to measure the financial performance of the selected oil companies. On comparing the financial ratio, South West Pinnacle exploration shows highest current ratio, average turnover and return on assets having good financial strength of the company. Jindal Exploration Industries Ltd. shows highest profit earning ratio. Hindustan Oil Exploration Company shows highest inventory turnover ratio. SVOGL Oil and Gas Energy shows lowest debtor turnover ratio. Selan Exploration Technologies shows positive du-pont analysis.
Application of GARCH Models for Volatility Modeling of Stock Market Returns: Evidence from Indian Stock Exchange
Stock markets significantly contribute to the economic development of any nation. They have a volatile character, which results in uncertainty of the returns; the variability causes volatility in speculative market prices and instability of business performance. Volatility plays a significant role in the investors, managers, policymakers and researchers' financial decisions as it can assess the risk exposures in their investments and the uncertainty in stock returns. The risk-averse investor avoids investment in a highly volatile market. The stock return forecasting leads to volatility forecasting. The paper analyzes the volatility concerning the Bombay Stock Exchange. The daily data of S&P Sensex 30 has been collected and used to calculate the volatility for the last 3 years (April 2016 to March 2019). The preliminary analysis is done based on descriptive statistics stationery test, normality test and serial correlation test. Volatility modeling is done by the ARCH and GARCH family models. The findings help investors make the right investment decisions in the Indian stock market in the presence of its volatile character.
Capital Structure, Financial Performance and Agency Theory in the Automobile Industry in India
The financial performance and capital structure decisions cannot be independent of each other in the light of agency costs of risk shifting behavior in times of financial distress. Against this backdrop, the study investigates the relationship between capital structure and financial performance of the Automobile Industry in India from 2001 to 2014. Panel data approach has been applied to find out if financial performance represented by Return on Assets (ROA) and Return on Equity (ROE) has any relationship with the capital structure. Debt equity ratio (D/E ratio) represents the leverage or capital structure. Variables like growth, size, tangibility and CFCR are used as control variables. D/E ratio has a significant impact on the financial performance of the Automobile Industry. Out of the control variables, only growth had a positive and significant impact on the financial performance of the companies. Other variables like size, tangibility and CFCR were found to be insignificant in influencing the financial performance of the companies. The negative relationship between D/E ratio and financial performance signals agency problem between firm's equity investor and debt holders, where firms are likely to have high leverage, leading to low financial performance. Thus debt creates opportunities for shareholders to invest in a suboptimal manner. This can result in shifting risk from shareholders to lenders and of appropriating wealth in their favor. Due to risk shifting behavior, there is possibility of debt overhang. This leads to financial distress and higher agency costs to firms. Default risk leads to debt overhang and eventually bankruptcy and this becomes a cost.