School of Commerce and Accountancy

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Financial Distress and Corporate Governance (Evidence from Pakistan)
(University of Management & Technology, 2018) Ahmed, Waqas
The present study is conducted to determine the relationship between corporate governance and financial distress. The objective of this study is to analyze whether corporate governance variables can predict financial distress, and to explore relationship between corporate governance mechanisms and financial distress for Pakistani listed companies. This study is descriptive in nature and random sampling is used to determine the relationship between corporate governance mechanism and financial distress. Population consisted of all firms registered on PSE and data is collected from 2011 to 2016. Sample consisted of 93 financially distressed firms and EPS is used as proxy for financially distressed firms. Those firms whose EPS is decreasing during given years are considered as financially distressed firms. Data is analyzed by using statistical methods, as data in present study is panel in nature, so fixed & random model is also applied to extract the relationship between dependent and independent variable. Results of this study show that board size of financially distressed firms was large with less independent directors. Firms hold less number of boards of directors meetings. It is also found in this study that financially distressed firms debt ratio was 46% and some firms are also following CEO duality.
Does Discretionary Accruals Affect the Financing Behaviour of Firms? Evidence from Pakistan (A case of selected non-financial listed firms)
(University of Management & Technology, 2017) Rehan Siddique, Muhammad
Purpose- In order to run organizations effectively and efficiently capital structure is consider as essential element. Researchers often try to explain the determinants of capital structure. After the mega corporate scandals like Enron, WorldCom, financial reporting disclosures has become one of the most discussed topics. The prime objective of this research is to explore the relationship between discretionary accruals and financing behaviour of a firm. Design/Methodology/Approach- Secondary research is done in this study in order to find out the relationship between discretionary accruals and financing behavior of a firm. This study covers a period from 2010 to 2015, further the proxy will used to measure financing behavior is gearing ratio and discretionary accruals will be calculated by modified Jones model. In order to find out this relationship fixed effect regression model is applied. Findings Result explains that discretionary accruals have a significant and positive relationship with gearing ratio. This reflects that those firms that manage their earnings have a higher leverage. Whereas on other hand Return on Assets (ROA) and size of a firm have a negative and significant relationship with gearing ratio. Furthermore tangibility has a positive and significant relationship with gearing ratio and Return on equity (ROE) has negative relationship but this relationship is insignificant. Originality / Value-This paper is useful organizations, companies as well as for Institute of Charted Accountants of Pakistan. This paper is equally useful for academic institutions as well as for future researchers.
The Impact of the Corporate Governance’ Characteristics on Corporate Social Responsibility Disclosure Index of Islamic and conventional banks in Pakistan
(University of Management and Technology, 2017) Parveen, Mariam
This study focuses on analyzing the relationship between determinants of corporate governance framework and disclosure of corporate social responsibility among Islamic and conventional banks in Pakistan. This study tests a sample of annual data for the period of the 2009-2016 using regression analysis approach with other estimation techniques; such as descriptive statistics, correlation analysis and incremental regression analysis. It found significant findings in favor of hypothesis regarding CEO Duality, Profitability and Board Independence for both Islamic and conventional banks. With the help of this study analysis, an effort has been made to explore relationship between corporate governance and corporate social responsibility disclosure in Pakistani Islamic and Conventional banks. All the empirical findings concluded that determinants of corporate governance have significant influence on the reporting of corporate social responsibility between Islamic and Conventional banks in Pakistan. The findings of this study are beneficial for policy makers and other expertise to evaluate the current standards of corporate governance framework by considering the impact on corporate social responsibility disclosure among banking sector.
The impact of auditor tenure on audit quality; evidence from Pakistan
(University of Management and Technology Lahore, 2016) Malik, Zohair Farooq
This study aims to examine the impact of auditor-client-relationship tenure on the quality of audit and whether the mandatory auditor-rotation will result in enhancement of audit quality. Discretionary accruals calculated with the help of Modified Jones Model 1991 are used as the proxy for audit quality. 121 companies related to non-financial sector of Pakistan listed in Pakistan Stock Exchange are selected after taking the data from year 2005 till year 2014. It is observed that the magnitude of discretionary accruals increases during the initial years of auditor-client-relationship tenure, reason being, the auditors are not equipped with required client-specific knowledge. Once the auditors acquire client-specific knowledge, the magnitude of discretionary accruals decreases, resulting in increase in audit quality. Based on the findings of this study, it is derived that the lengthy auditor-client-relationship tenure does not result in decrease in audit quality. Furthermore, the Big 4 audit firms acquire client-specific knowledge far more earlier as compared to other auditors (three years as compared to six years). The results of the study suggest that the regulators and standards setters in Pakistan should reconsider their policy regarding mandatory-auditor-client relationship tenure.
Cash dividend disbursement, retained earnings and their impact on stock price volatility- a case of selected non-financial firms of Pakista
(University of Management and Technology Lahore, 2017) Shaheen Adil
How corporate dividend policy and retained earning impacts on market stock price volatility is broadly researched topic beside this it remained a matter of discussion since over last five decades. This study is conducted to know the relationship of corporate dividend policy (cash dividends), retained earnings and their impact on stock price volatility. The past researches have shown mixed evidences of this relationship, and results are still not conclusive all around the world including Pakistan. Not much studies have been conducted in Pakistanwhich have contributed for conclusive remarks on this untapped area of research in the growing economy.To know this relationship several researches were conducted but the results remain inconclusive as whether the relationship existed or not. In this study there were used modern statistical and technological techniques and tools respectively for analyzing the data and extracting the results. A total of 75 companies data was initially collected where after scrutiny on different parameters mentioned in the study, only 50 companies from year 2008 to 2015were left to be analyzed as the data was not wholly available for the remaining companies as per research requirement. Two separate models are run and results were determined that there exists positive association of Corporate Dividend Policy, Retained earnings with Stock price volatility.
Impact of corporate social responsibility on financial performance: A case of KSE non-financial firms
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Rasheed, Burhan
Conventionally, the researchers in Pakistan indicated investment in Corporate Social Responsibility (CSR), and its impact on Corporate Financial Performance (CFP). Basically there are three methods: in first method CSR is measured by investment in CSR activities; second method is content analysis of CSR disclosure in financial reports. Third method is based on reputation index of firms regarding CSR, given by independent agencies. In Pakistan, there is not a single authority to give reputation index, so this method is not applicable in Pakistan. In this study first two methods are focused to examine the impact of corporate social responsibility on corporate financial performance of 70 public limited companies listed in Karachi Stock Exchange. But due to unavailability of data it limited to 50 non-financial firms for the time period of 2008-2013. Results of this study showed that CSR has positive impact on CFP. Investment in CSR has positive impact on both profits before tax and earnings per share. CSR disclosure also has positive impact on return on sales, return on equity and return on assets.
The post-merger performance of non-financial acquiring firms – An evidence from Pakistan
(UNIVERSITY OF MANAGEMENT AND TECHNOLOGY, 2015) Malik, Muhammad Nauman
This study highlights the importance of mergers and acquisitions as an inorganic growth strategy. The study examines the impact of mergers and acquisitions on the financial performance of 18 non-financial Pakistani companies involved in the M&A activity during 2008 and 2009. Data was collected from the annual reports of sample firms for a total period of six years (three years before the M&A event and three years after the event). This pre and post merger secondary data was compared by using profitability, liquidity and leverage measures. These measures included eight industry adjusted ratios calculated through Microsoft Excel. Correlation and Paired sample t-tests were applied on these accounting ratios with the help of Statistical Package for the Social Sciences (SPSS). This study is first of its nature in Pakistan to use industry adjusted accounting ratios with a significant large number of cases.

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