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IAS 21 - The Effects of Changes in Foreign Exchange Rates: Matters Arising
Emuebie Emeke,
Ogundeyi Adebayo,
Fakuade Olufunmilayo,
Tunji Shiyanbola
Issue:
Volume 7, Issue 3, September 2022
Pages:
92-98
Received:
22 May 2022
Accepted:
20 June 2022
Published:
13 July 2022
DOI:
10.11648/j.ijafrm.20220703.11
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Abstract: One of the aims of the International Accounting Standard Board (IASB) is to enhance the quality of financial reporting and ensure universality in comparison of financial statements produced in different entities and countries by users of such financial statements. International Accounting Standard (IAS) 21: Effect of Changes in Foreign Exchange Rates is applicable to Multinational entities and businesses that engage in Foreign Currency denominated transactions. Thus, this study examines IAS 21 and matters arising from its adoption and application. The objective, scope, measurement and presentation are discussed as it affects entities with foreign operations such as subsidiaries, associates, joint venture and branch of an entity operating under a different environment subjected to different laws and currency of exchange. The study employs exploratory method in discussing concepts like Currency Translation, Foreign Currency Transactions, Foreign Currency Translations and Functional Currency Determination with the Stakeholder Salience Theory as the underpinning theory. Closing Rates, Exchange Rates and Fair Value of non-monetary items were examined as they pertain to Reporting of Foreign Currency Transactions. The application of the standard does not cover items covered by other standards such as IAS 39 on Financial Instruments, IAS 7 on Statement of Cashflow. Lack of Exchangeability of Cryptocurrencies have been identified as the main constraint in the application of the standard on virtual currency transactions Thus the study concludes that, although the standard provides the framework for accounting for foreign operations denominated in foreign currencies, management discretion might override the principles as other matters relating to foreign operations are still not addressed. It is therefore recommended that, While the IASB attempt to address currency exchangeability is appropriate, IAS 21 should address the impact of virtual currencies (cryptocurrencies) on overseas transactions and translations.
Abstract: One of the aims of the International Accounting Standard Board (IASB) is to enhance the quality of financial reporting and ensure universality in comparison of financial statements produced in different entities and countries by users of such financial statements. International Accounting Standard (IAS) 21: Effect of Changes in Foreign Exchange Rat...
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The Impact of Credit Risk, Liquidity, Capital, and Market Structure on Bank Profitability: Evidence from a Developing Economy
Issue:
Volume 7, Issue 3, September 2022
Pages:
99-107
Received:
3 May 2022
Accepted:
8 July 2022
Published:
20 July 2022
DOI:
10.11648/j.ijafrm.20220703.12
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Abstract: In this ever-changing competitive environment, the banking business, compared to other types of business, is ultimately exposed to risks. Banks now days are operating in a rapidly innovative industry with a lot of profit pressure that encourage them to create more and more value-added services to offer and better satisfy the customers. The Palestinian banking system operate in a risky, complex, changeable economic and political environment, bank managements should be aware of these circumstances. This study attempts to examine the impact of credit risk, liquidity, capital, and market structure on banks' profitability in a developing economy (Palestine) over eleven years (2010 - 2020). A dynamic panel analysis is applied to the sample of 12 banks with three econometric models representing profitability indicators employed by the study. In addition to the linear regression models, we used a Generalized Method of Moments (GMM) estimator. The results revealed that credit risk, liquidity, capital, and market structure impact bank profitability measured by ROA, ROE, and NPM. Cost efficiency, income diversification, and loan growth have been used as control variables had a significant impact on profitability except for loan growth had no impact.
Abstract: In this ever-changing competitive environment, the banking business, compared to other types of business, is ultimately exposed to risks. Banks now days are operating in a rapidly innovative industry with a lot of profit pressure that encourage them to create more and more value-added services to offer and better satisfy the customers. The Palestin...
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Auditing New Approach of Credit Loss for Financial Institutions in the Audit Data Analytics Era: A Field Study in Egypt
Mohamed Shaaban Ibrahim,
Rana Mahmoud Abdou
Issue:
Volume 7, Issue 3, September 2022
Pages:
108-132
Received:
15 July 2022
Accepted:
29 July 2022
Published:
24 August 2022
DOI:
10.11648/j.ijafrm.20220703.13
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Abstract: Purpose-The main objective of the study to propose Audit Data Analytic Tools (ADA) to develop the role of the External Auditor in enhancing the communication of the Expected Credit Loss (ECL) estimate as a very complex and subjective item of Critical Audit Matters (CAMS) of the New Audit Report. Design/methodology/approach- The study depends on uses of the field approach through a questionnaire distributed by the researcher to academic staff members of some selected universities and the audit professionals whether the internal auditors in banks listed and controlled by the Egyptian central bank & the external auditors registered in the financial regulatory authority of the big auditing firm in Egypt with expertise in the banking industry sector (i.e. Pwc, KPMG, Grand Thorton, EY) to test the relevance of the proposed framework for CAMS communication. Findings-The findings of the study show the significant importance of ECL i.e., CAMS Communication to the financial statement users as it promotes the user to the audit report and finally improves the understanding and relevance of the related financial statements. Thus, When the CAMS disclosures in the audit report are provide, investors may be more confident that the auditors have determined and appropriately addressed the most highly risky assertions in the financial statements which reflect on the audit quality. Originality/value-This study contributes to the audit literature by proposing a suitable Audit Data analytics tool (tools) to develop an independent estimate (i.e. Point of estimate) for the new ECL as a very complex and subjective CAMS item in order to stand on its reasonableness by the external auditor. As well as proposing the relevant form for communicating such information as a CAMS in the l audit report.
Abstract: Purpose-The main objective of the study to propose Audit Data Analytic Tools (ADA) to develop the role of the External Auditor in enhancing the communication of the Expected Credit Loss (ECL) estimate as a very complex and subjective item of Critical Audit Matters (CAMS) of the New Audit Report. Design/methodology/approach- The study depends on use...
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Effects of Oil and Non-oil Tax Revenue on Economic Growth in Nigeria: Evidence of Quarterly Tax Inflows from 2010 to 2019
Ifeoma Osamor,
Matthew Abata,
Adebola Adebanjo
Issue:
Volume 7, Issue 3, September 2022
Pages:
133-139
Received:
3 August 2022
Accepted:
23 August 2022
Published:
16 September 2022
DOI:
10.11648/j.ijafrm.20220703.14
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Abstract: Oil boom in 1970s have positive and negative impact on the Nigerian economy. The recent oil price dwindling in the world has created problems for government of the country to adequately generate revenue to settle government expenditures. The study investigated the effects of oil and non-oil taxes revenue on economic growth in Nigeria. Gross Domestic Product (GDP) was used as proxy for economic growth, while oil tax revenue was proxy with Petroleum Profit Tax (PPT); non-oil taxes were proxy with Company Income Tax (CIT), Capital Gain Tax (CGT), Stamp Duties (SD) and Education Tax (EDT). Ex-post facto research design was adopted and secondary data were sourced from the Federal Inland Revenue Service (FIRS) and Central Banks of Nigeria (CBN) Statistical Bulletin on quarterly basis for nine years (2011-2019). Descriptive statistics, Unit roots test, Toda Yamamoto (Granger Causality Test and Wald Test) were used to analyze the time series data. The results of the study showed that oil tax revenue have no influence on economic growth while non-oil taxes have effect on economic growth. Therefore, the study recommended that government need to initiate regular tax reforms that will encourage small and medium scale enterprises (SME’s) and encourage full diversification of the economy into technological, agricultural, mechanical and productivity aspects to improve the standard of living of the citizens.
Abstract: Oil boom in 1970s have positive and negative impact on the Nigerian economy. The recent oil price dwindling in the world has created problems for government of the country to adequately generate revenue to settle government expenditures. The study investigated the effects of oil and non-oil taxes revenue on economic growth in Nigeria. Gross Domesti...
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