Abstract
The South Asian Journal of Finance is an international open access and double-blind peer reviewed journal focusing on the areas of finance in South Asian region. It is published bi-annually (June and December).
Highlights
Financial reporting entails communicating financial and non-financial information to a variety of stakeholders, including shareholders, investors, lenders, banks and other regulatory bodies such as the Inland Revenue Department (IRD), in order for them to make accurate decisions based on financial statements
The findings revealed that ratios of net profit to total assets and receivables to sales ratios negatively influence stock returns
The case is with the inventory to sales (InvSal) and receivables to sales (RecSal), as they result in moderate mean values, which can be concluded that the inventory turnover and receivables turnover is quite high due to frequent inventory renewals and frequent cash collections that are somewhat inconsistent with the literature
Summary
Managers' efforts to manipulate earnings figures for their own benefit are reflected in the concept of creative accounting (Dimitropoulos & Asteriou, 2009) and the techniques used to manipulate financial and non-financial figures in order to make entity appear financially healthier than it is by concealing the true financial picture of the entity for a variety of reasons such as avoiding tax payments, obtaining loans, attracting investments, and so on (Brous et al, 2001; Dechow & Skinner, 2000; Eckbo et al, 2000; Patten & Trompeter, 2003; Shivakumar, 2000 as cited in Dimitropoulos & Asteriou, 2009). These manipulations may cause earning figures to deviate from their original value, misleading market participants and decision-makers about the return-earnings relationship (Dimitropoulos & Asteriou, 2009)
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