Browsing by Author "Gyapong E"

Now showing 1 - 2 of 2
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    Internal Audit in Microfinance Institutions-Evidence from Transitional and Developing Economies
    (John Wiley & Sons Ltd on behalf of European Bank for Reconstruction and Development., 2023-12-11) Omidiji A; Botica Redmayne N; Ehalaiye D; Gyapong E
    Microfinance institutions (MFIs) are hybrid organisations that strive to balance business and social goals. This paper examines the determinants of the internal audit (IA) function in MFIs, with particular emphasis on the business goals, specifically efficiency, productivity, regulation and the gross portfolio yield. We also investigate whether the establishment of an IA function is associated with MFI's focus on their social objectives relating to outreach, and women director appointments. Multivariate regression results from 1025 MFIs across 63 countries show that MFIs' focus on their social objectives is related to their propensity to establish an IA function. Thus, outreach and women director appointments are positively related to the establishment of an IA function. Similarly, in terms of the performance emphasis, the gross portfolio yield (inefficiency) increases (decreases) the likelihood of establishing an IA, but productivity and regulation have no effect. The findings suggest that MFIs' dual focus on social and business objectives impacts the establishment of internal audits. The results are robust to various measurements and estimations.
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    The value of discretion in Africa: Evidence from acquired intangible assets under IFRS 3
    (World Scientific Publishing Company, 2020-06) Tunyi A; Ehalaiye D; Gyapong E; Ntim C; Chaney, PK
    This paper examines the value of managerial discretion in financial reporting by exploring the value relevance of intangible assets acquired in business combinations (AIA) before and after the 2008 International Financial Reporting Standard (IFRS) 3 amendment. The 2008 IFRS 3 amendment gave managers the discretion to recognize previously unrecognized intangibles in the target firm, hence, we posit that if managerial discretion improves the quality of financial reporting, we should observe an increase in the value relevance of AIA after the amendment. Our empirical analysis is based on a dataset of 603 mergers announced between 2004 and 2016, across seven African countries. Consistent with our main hypothesis, we find that the value relevance of AIA, predominantly acquired goodwill (AGW), increased after the amendment, suggesting that managerial discretion improves the quality of financial information. Our results further show that the value of discretion is moderated by the underlying institutional quality, with the value relevance of AIA being greater in high-quality institutional contexts. Our findings are robust to alternative measures of AIA, alternative models for testing value relevance, and various controls for endogeneity. Overall, our findings have important implications for accounting standard-setters, governments, investors, and practitioners.