Accounting and Finance Dissertation

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An Assessment on Credit Management Practices of Commercial Banks in Ethiopia: /The Case of Six Selected Private Commercial Banks/
(AAU, 2024-03-13) Kahsu Hluf; Abebaw Kassie (PhD)
Now days, the need to take credit to do a business is getting increased. This is so because entrepreneurs and business men have good business ideas but do not have initial capital to make their business in to practice. Whenever lenders (banks) decide to grant a credit, they need to have credit management and method of collecting it. This research work, therefore, dealt with the `Credit Management practices’ of selected commercial banks. The general objective is, then, to assess the banks` credit management practices and method of collections by taking 2023 as a reference year. The research design of this paper work is descriptive. The sampling technique that the researcher used is that of non-probability using convenience and purposive sampling. Both qualitative and quantitative approaches were used. The data gathered from the field and document analysis were tabulated, organized and systematically demonstrated in the form of tables and graphs. The major research findings of this research work revealed that the overall mean score value of credit appraisal variable was very satisfactory that is most respondents strongly agree to the existing credit appraisal. Besides, the overall mean score value related to the variable collection policy andits strategy was satisfactory that is most respondents agree to the existing credit collection policy. Further, the overall mean score value of the variable credit lending policy and related strategies showed average level of satisfaction. The criteria to get a credit need to have either buildings or vehicles, with which the lower society could not afford. Thus, the researcher recommends original educational documents to be considered as collateral to get a loan. This piece of work could also open a way for further research works treating the topic in a very wide way by considering the views of credit customers.
Enterprise Resource Planning (ERP) And Its Accounting/Financial Management Module Implementation Challenges: The Case of Ethio Telecom
(AAU, 2024-05-21) Aweke Berhanu; Takele Fufa (PhD)
Enterprise Resource Planning (ERP) is a software solution that integrates different functional areas of an organization process and data into a single system that is shared within the organization. From the fact that more than two decades of experience regarding the adoption and implementation of ERP system with its different functional components in organizations, ERP’s success is questionable. Though ERP success stories are published in past research studies, the failure rate of ERP systems is relatively high. The purpose of this study was to find issues and challenges and assess the degree of criticality of these issues during ERP in Ethio Telecom. The research carried out a descriptive study in evaluating the implementation challenges of ERP and its accounting/financial management process within Ethio Telecom. The evaluation was made based on the following eight Critical Success Factors which are Top Management support, Integration, Performance, Decision making, Employee Participation, Project Team Competency and Human Capability, Objective of ERP implementation, and IT infrastructure. The population of this study were employees and top- and low-level managers of Ethio Telecom. For the purpose of getting respondents who have good understanding of ERP a purposive sampling technique was used. Both primary and secondary data were collected. The study utilized both quantitative and qualitative data analysis techniques. Significant number of the respondents believed the implementation of an ERP system can be a complex and challenging undertaking. There are several technical problems that can arise during the implementation process, which can delay or even derail the project. Some of the most common technical problems that can occur during ERP implementation include incompatibility with existing systems, data migration, training, and user resistance. However, it is recommended that the following steps need to be taken to improve ERP implementation challenge. These steps include identify the root cause of the failure, developing a corrective action plan, implementing the corrective action plan, monitoring the implementation, and finally learning from the challenges.
Capital Markets Integration in Developing Countries: Lessons for Ethiopia
(A.A.U, 2022-11-09) Yabsira Dereje; Temesgen Worku (PhD)
This study aimed at drawing lessons from the capital market integration experiences of East African Community (EAC) and Association of South East Asian Nations (ASEAN), and recommending to Ethiopia. To do so, the study raised research questions on the capital market integration experiences of the two Regional Economic Communities (RECs), the possible long run and short run relationship between stock traded value and other explanatory variables such as liberalization, macroeconomic factors, and regulatory qualities, and finally what lessons Ethiopia can learn from EAC and ASEAN experiences. To address these questions, the study used a convergent parallel mixed research design, which used both qualitative (document and audio visual data review) and quantitative (panel ARDL) methods. The data of the study were entirely secondary data. As such, the study found out that the regional capital market integration in EAC and ASEAN states is consolidating from time to time and amelioration in members’ financial system and crisis prevention capacity, especially in ASEAN, was observed; there is also a statistically significant long run relationship between stock traded value and macroeconomic variables and regulatory qualities, and lessons such as the necessity of capital market integration or cooperation, especially with RECs like Common Market for Eastern and Southern Africa (COMESA), prudent macroeconomic policies and regulatory frameworks were drawn for Ethiopia. Finally, the study wrapped up recommending the necessity of participating in regional cooperation and integration of stock markets and reconsidering the viability of Ethiopia’s macroeconomic policies and regulatory frameworks through the lenses of liberalized financial system.
Role Of Budget And Budgetary Control System on the Effectiveness of Public Enterprise: The Case of Ethiopian Electric Utility
(AAU, 2024-01-29) Hana G/Medhin; Degefe Duressa (PhD)
This study focuses on the role of budget and budgetary control systems in the effectiveness of public enterprises, using the case of EEU. The study surveyed 110 experts from the Finance, procurement, Audit & planning department of EEU, using a census survey method. A mixed approach method was used, with primary data collected through questionnaires and interviews, and secondary data obtained through document analysis. The quantitative data was analyzed using SPSS-version 26, using descriptive statistics. The study found that budgeting and budgetary control systems play a vital role in aligning operational plans, resource allocation, risk identification, and progress tracking with the strategic plan. These systems also have positive effects on responsibility alignment, accountability, transparency, individual empowerment, and performance management within the organization. The study also highlights the positive influence of budgetary performance evaluation on employee motivation. Based on these findings, the study concludes that budget and budgetary control systems effectively support decision-making, resource allocation, and performance evaluation within public enterprises. The study recommends that EEU and other public enterprises recognize the importance of aligning operational plans with the strategic plan, coordinating activities among different budgetary control units, enhancing accountability and responsibility, and linking performance evaluation to employee motivation. The study also suggests integrating budgeting with strategic decision-making, continuous evaluation and improvement of the budgeting process, and improving the availability and accessibility of timely and accurate information for budgeting and budgetary control processes.
Assessment of Factors Affecting the Value-Added Tax Collection Performance in the Case of Gullele Sub-city, Addis Ababa, Ethiopia
(AAU, 2024-03-13) Mekbib Altaye; Alem Hagos (PhD)
Recently, Value Added Tax (VAT) has become a major worldwide tax instrument which enhances economic growth, and it has a significant factor in increasing government revenue, which funds expenditures. However, governments have addressed many obstacles to ensure effective tax collection. The study aims to assess the factors affecting the Value-Added Tax (VAT) Collection Performance, in the case of the Gullele sub-city, Addis Ababa Ethiopia. In doing so, the study evaluates the VAT collection performance factor in more detail. Both qualitative and quantitative research methods were used to collect and analyze primary and secondary data for the study. Self-administered questionnaires to the branch office employees were used to collect primary data. The target populations of the study were the staff members of the Gullele sub city small scale taxpayer’s branch office. In the branch office there were 32 total workers in the taxation department who were directly involved in VAT collection and administration. The study used purposive and convenient nonprobability sampling technique. Accordingly, the total sample size considered by the researcher was 30. Descriptive Survey data analysis method used, and STATA 14 were used for the quantitative analysis. Furthermore, secondary data was gathered to assess the factors that affect the VAT collection performance. The lack of advanced technology, the low number of registered VAT payers and those who announced their VAT return with payment, the inadequate capacity-building and training programs for tax officials and staff, and other tax administrative practices are the main causes of the low performance of VAT collection. The study concluded by recommending the use of cutting-edge technology, ongoing staff capacity building, proper intention for the planning of VAT collection, hiring the necessary workforce, enhancing consumer and VAT payer awareness, and increasing the number of VAT payers to increase the performance of VAT in Ethiopia. It also needs the government’s and citizens' due attention, and the concerned body may take the findings worthwhile for corrective action.
Assessment of Ethiopian leather industry performance (An Empirical study)
(AAU, 2023-12-23) Yilkal Tadesse; Alem Hagos (PhD)
The focus of the research is to assess the performance of Ethiopian leather industry in the case of the pittard, colba and batu tannery. mixed method design was employed. Both qualitative and quantitative re search approach were applied. Stratified, purposive and lottery method was used. Primary and secondary data were collected by questionnaires, interview and data review. To analyze the data, statistical package for social science (SPSS) which is statistical software package become applicable accordingly. The finding of the study revealed that the tanneries performance was lower due to lack of imported chemicals, mangers capacity and marketing linkage in running production and sales. The management of the tannery perceives lack of chemicals. In addition, that there are significant marketing managers who do not get op portunity for training globally about linkage with traders. The coordination between different tanneries in the standards of quality of leathers is weak. The LIDI gives more focus to the export targets, less main streaming of qualities. Lastly the study recommends; the tanneries should discuss with government and other stakeholders how to import chemicals frequently or produce chemicals locally so that the manufac turer will produce quality leathers and the performance will be higher. Secondly; the leather industry per formance of the sector will increase if the managers get training on global market Besides, the govern ment should support and fulfill infrastructure and skill development continuously through bench marking programs with different middle-income countries, The target population and sampling method commu nity, government body (LIDI), management and employees in production departmen
The Trend of Loan Recovery Performance of Nib International Bank: a Case Study of Addis Ababa Branches
(A.A.U, 2022-06-11) Mikias Nigussie; Habtamu Berhanu (PhD)
The study examines the trend of loan recovery performance of NIB Bank; a case study of Addis Ababa Branches. This research used both descriptive and analytical designs to attain the objective. The data was gathered from both primary and secondary sources. A questionnaire was used to obtain primary data using the simple random selection method, a total of 141 respondents were selected from the bank’s credit analysts, loan officers and loan follow up officials. Moreover, semi-structured and structured interviewees also used to gather information from credit officers. Secondary data was collected from NIB annual reports and supervisory reports. SPSS was used to analyze data and also using tables and a brief explanation by words were employed. The results from the questionnaire and interview revealed that the time period to pay back the loan and loan recovery process has an influence on the loan recovery performance of the NIB. In addition, loan recovery of the bank is influenced by the policy of the bank. The study suggests that the policy of the bank has to be revised in such way that by incorporating other banks experience and our country current business environment so as to improve loan recovery performance of the bank
Assessing Product Differentiation and Its Implication on Bank Performance; The Case of Selected Commercial Banks In Ethiopia
(AAU, 2024-01-15) Andualem Assefa; Abebe Yitayew (PhD)
This study aims to assess the practices of product differentiation and it’s implication on financial performance of commercial banks in Ethiopia. The researcher used explanatory research design complemented with a qualitative research approach. Using simple random sampling technique 74 samples were selected among 93 employees from commercial banks of Ethiopia located in Addis Ababa. The data were analyzed using basic descriptive statistics including frequencies, percentages, mean, and cross-tabs. The findings of the study indicate that the banks have opened several branches in various parts of the country which have led to increased customers and this in turn has improved the proximity and customer convenience. It was also evident that the banks have diversified their operations by offering differentiated products and services associated with loans and deposits. It was also made evident, as a result of differentiation, the banks have attained, high profitability level, and favorable liquidity level to help them meet their short term obligations and also it creates to manage assets and liabilities too. Furthermore, the study found that there is a positive relationship between product differentiation, in terms of product innovation, product design quality and uniqueness with the financial performance of the selected banks. This research concludes that in order to improve the banks business performance, banks should apply new product/ service that their competitors desperately needs. Beside the aforementioned variable that, management quality plays a vital role in maintaining and boosts business performance of Ethiopian banks. Finally, this comprehensive evidence will help policy makers to give attention to product differential and it’s implication on the banks financial performance to gain competitive advantage over the rivals and has paramount importance for the clients to address and exceed their expectations too
The Effect of Exchange Rate Fluctuation on The Profitability of Private Commercial Banks in Ethiopia
(AAU, 2024-01-12) Alem Berhe Belay; Takele Fufa (PhD)
The debate on exchange rate policy in developing countries like Ethiopia is ongoing due to its impact on economic performance. The National Bank of Ethiopia (NBE) manages international reserves and foreign exchange assets, aiming to maintain price stability. The purpose of this study is to examine the experience of six Ethiopian private commercial banks over the past twenty years, focusing on the effects of foreign exchange rate fluctuations on their financial profitability (ROA). The study utilized secondary data sources like audited financial statements of six private commercial banks and the National Bank of Ethiopia's annual report used for a period of twenty years (2003-2022) with the total of 120 observations. The study employed a quantitative research methodology by using purposive sampling technique and explanatory type of research design. The study analyzed panel data using descriptive statistics and multiple linear regression techniques by using E-views version 10 econometric software. This econometrics model was used to examine the relationship between foreign exchange rates, inflation rates, gross domestic product, net interest margin, and bank size with bank profitability indicator. The dependent variable return on assets (ROA) was used as a measure of profitability. The major findings of the study show that foreign exchange rate and inflation rate have statistically insignificant and positive relationship with banks’ profitability. Further, the results from the panel regression show that, GDP have a negative and statistically significant relationship with banks’ profitability. However, the relationship for net interest margin and bank size is found to be positive relationship and statistically significant. Based on the finding of the study, the researcher recommends focusing and redesigns the banks together with significant bank specific factor and macroeconomic factor of profitability of private commercials banks in Ethiopia
Prospects and Preparedness of Establishment of Stock Exchange Market in Ethiopia
(A.A.U, 2022-02-17) Samuel Gebreyes; Alem Hagos (PhD)
Fraud in the Banking Industry, a Case Study of Ethiopia
(A.A.U, 2022-11-02) Techalu Setarge; Habtamu Berhanu (PhD)
This study aimed to evaluate banking fraud in the banking sector in Ethiopia. The study's goals were to identify the most common fraud types, their root causes, and how fraud affects banks' financial health. The study used a descriptive research design using 18 banks out of 28 banks as the case. Using simple random sampling technique, 84 employees, who represented 107 of the populations, and, 3 employees from NBE by purposive sampling, were included in the sample size. SPSS version 25 was used to determine the percentage and frequency of the data obtained. The research revealed that fraudulent money transfers, unauthorized withdrawals, theft and embezzlement, account opening fraud, money laundering, loan document falsification, unauthorized use of debit cards (ATM), and finally terrorist financing are the primary types of fraud that predominantly occur. Other than these, the main variables that contribute to fraud include shifting societal norms, economic pressure, a lack of training, increasingly complex crimes, socio cultural elements including ethics, crime rates, education, unemployment, and political elements. Finally, the study draws the conclusion that fraud has a significant negative impact on Ethiopian banks' financial performance, whether directly or indirectly. Based on the findings, the study suggests, among other things, that Ethiopian banks develop and implement efficient management quality, the regulatory and supervisory organizations of banks in Ethiopia must strengthen their supervision, the management needs updated technology, staff training, the personnel should have had a thorough background check before being hired, The private and governments bank should work together by developing a centralized fraud controlling mechanisms, that would reduce the incidence of fraud and fraudulent practices in the country’s banking sector.
Assessment of Financial Management of Urban Local Governments of Addis Ababa, Ethiopia
(AAU, 2018-01-08) Milen Amare; Abebaw Kassie (PhD)
Municipal Financial management particularly the aspect of municipal revenue collection and financing of municipal functions are important areas of concern in Addis Ababa. Addis Ababa city administration is facing with an ever increasing demand for municipal services and this challenge will continue in so far as the city continues to expand. This issue is directly linked to the ability of the city administration in generating adequate and increasing revenue and in its ability to efficiently utilize the available resources. The revenue enhancement plan of the city shows that despite the untapped potential, the city couldn’t collect adequate own revenue that can enable it serve residents of existing and new expansion areas. This study therefore, makes an effort to explore whether expenditures for municipal functions is financed by own revenue; if there are revenue lines that conflicts to each other or with that of state revenues; the cities experience in terms of budget predictability and to look in to the contributing factors towards revenue collection performance. Secondary data (plan and actual data for revenue and expenditure) were used to make analysis of revenue performance over time and to assess utilization capability of the city. Semi structured interview with officials of revenue bureau and BoFED were carried out to collaborate the findings from the secondary data. In addition 60 respondents were purposively targeted from among residents of two subjectively selected woredas to answer a research question. Distribution tables, charts, percentages and examination of bases and timing of municipal revenue levies followed a descriptions and inferences were employed to analyze data and information. The study has discovered that due to shortage in municipal revenue collections, municipal functions are partly financed by state revenue. Budget predictability problem is more on municipal revenue than state revenue and underutilization of budget is commonly observed over the study years. Through the findings of the study, residents aware of municipal revenues and do not have objection to the laws governing such revenues, rather they feel that they are morally obliged to pay their share. However they believe that there is discrimination among tax payers and claim that even for similar businesses the amount of tax and municipal charges is not uniform. Nepotism and corruption are figured out at the top cause for such discrimination
The Determinant of Foreign Exchange Rate Volatility on the Financial Performance of Private Commercial Banks in Ethiopia
(AAU, 2024-01-10) Daniel Tsegaye; Alem Hagos (PhD)
The abstract discusses the findings of a study conducted on the determinant of foreign exchange rates on the financial performance of private commercial banks in Ethiopia. The study reveals a significant negative relationship between foreign exchange rates and the financial performance of these banks. This highlights the importance of effectively managing foreign exchange risks for banks operating in Ethiopia. The abstract also suggests a recommendation to increase exports and foreign direct investment in order to enhance foreign currency inflows. By doing so, the study suggests that the impact of fluctuations in foreign exchange rates on banks' profitability could be reduced. This recommendation aligns with the goal of improving the overall financial performance of private commercial banks in Ethiopia. Another interesting finding of the study is a positive and significant relationship between bank size and financial performance. This implies that larger banks may have better risk management capabilities and are more capable of capitalizing on opportunities compared to smaller banks. However, it is important to note that this relationship may not hold true universally, as there are various factors that can influence a bank's financial performance. Generally, the study reveals a significant and negative relationship between interest rate spreads and financial performance. This finding is unexpected because wider interest rate spreads would generally be expected to benefit banks. Further exploration is needed to understand why this relationship does not appear to hold true in the context of the study.In conclusion, the recommendations provided by the study are considered sound and have the potential to enhance the financial performance of private commercial banks in Ethiopia. It would be interesting to observe if these recommendations are implemented and whether they yield positive outcomes for the banking sector in the country. Continued research and analysis in this area could provide further insights into the dynamics of the Ethiopian banking
Assessment of VAT (value added tax) Administration in Federal Democratic Republic of Ethiopia Ministry of Revenue Medium level Taxpayers Branch Office
(AAU, 2024-01-15) Natnael Tesfaye; Takele Fufa (PhD)
The general objective of this research assesses value added tax administration specifically addresses: effectiveness and efficiency of tax administration, problems of VAT administration, attitude of taxpayers and type of system. To achieve this objective, the researcher used both qualitative and quantitative descriptive research designs and a sample of employees and tax payers of the authority were selected using a random sampling technique among the probability sampling methods. From 3426 tax payers and 358 employees samples were selected whose activity is directly related. The researcher used questionnaires, Interviews and relevant documents to collect primary and secondary data from the branch by reviewing documents from annual reports. Graphs, table, Percentages were used in analyzing the collected data (findings). Secondary data were obtained from the; audit, enforcement and refund performance reports of the branch. Tables, percentages and graphs were used for data analysis. The Statistical Package for Social Sciences (SPSS) version 26 was the tools used for quantitative data analysis. From the outcome of the study the major obstacles that hinder VAT Administration are low rate of voluntary compliance, lack of taxpayer’s awareness, shortage of audit and refund process, and affect the follow-up and controlling activities, relatively low rate of audit and enforcement, and late payment system. The paper suggests that in Federal Democratic Republic of Ethiopia Ministry of Revenue Medium Level taxpayers’ branch office, attempting to implement what is legislated in the main areas deserves the Government’s due attention. The study also emphasizes the need to strengthen the administration capacity in general and the VAT administration system in particular as efficiently as possible. The outcomes of the research showed lack of tax awareness among the society and strong education programs as well as lack of trust between taxpayers and administrators as major challenges to the VAT system in the country. Therefore, the researcher recommended developing taxpayer’s awareness to increase voluntary compliance, refund process and strengthen audit and enforcement capacity of the Federal Democratic Republic of Ethiopia Ministry of Revenue Medium Level taxpayers’ branch office.
Assessment of Vat (Value Added Tax) Administration in Federal Democratic Republic Of Ethiopia Ministry of Revenue Medium Level Taxpayers Branch office
(AAU, 2024-01-10) Natnael Tesfaye; Takele Fufa (Phd)
The general objective of this research assesses value added tax administration specifically addresses: effectiveness and efficiency of tax administration, problems of VAT administration, attitude of taxpayers and type of system. To achieve this objective, the researcher used both qualitative and quantitative descriptive research designs and a sample of employees and tax payers of the authority were selected using a random sampling technique among the probability sampling methods. From 3426 tax payers and 358 employees samples were selected whose activity is directly related. The researcher used questionnaires, Interviews and relevant documents to collect primary and secondary data from the branch by reviewing documents from annual reports. Graphs, table, Percentages were used in analyzing the collected data (findings). Secondary data were obtained from the; audit, enforcement and refund performance reports of the branch. Tables, percentages and graphs were used for data analysis. The Statistical Package for Social Sciences (SPSS) version 26 was the tools used for quantitative data analysis. From the outcome of the study the major obstacles that hinder VAT Administration are low rate of voluntary compliance, lack of taxpayer’s awareness, shortage of audit and refund process, and affect the follow-up and controlling activities, relatively low rate of audit and enforcement, and late payment system. The paper suggests that in Federal Democratic Republic of Ethiopia Ministry of Revenue Medium Level taxpayers’ branch office, attempting to implement what is legislated in the main areas deserves the Government’s due attention. The study also emphasizes the need to strengthen the administration capacity in general and the VAT administration system in particular as efficiently as possible. The outcomes of the research showed lack of tax awareness among the society and strong education programs as well as lack of trust between taxpayers and administrators as major challenges to the VAT system in the country. Therefore, the researcher recommended developing taxpayer’s awareness to increase voluntary compliance, refund process and strengthen audit and enforcement capacity of the Federal Democratic Republic of Ethiopia Ministry of Revenue Medium Level taxpayers’ branch office. VAT, VAT Administration, Refund, Compliance, Enforcement
Assessment of Internal Audit Practice in the Cases of Ethiopian Airlines Group
(A.A.U, 2022-03-22) Henok Balew; Abebaw Kassie (PhD)
Internal audit maintains for a business enterprise in the global business environment that can ensure the safeguarding of the enterprise's assets. Aside from the previously conducted research, this paper would examine the internal auditing practices of Ethiopian Airlines group. The overall goal of this study was to evaluate internal audit practices in the airline industry using Ethiopian Airlines as an example. Specific objectives of this study were to evaluate the overall structure of the internal audit system, the obstacles that the internal audit encountered, the autonomy of the internal audit from management, and the actual practice's compliance with standards of the organization. This study used a descriptive research method with a judgmental or purposive sampling technique. The target population for the study was employees of Ethiopian Airlines located at Head Office, Internal audit division. The sample size for this study was 50 from all employees in the internal audit department and 92% of the target sample was attained through questionnaires sent. The analysis shows that there is strong internal audit structure and adequacy across the company and there is independence of the audit section from the company line structure. This audit report also revealed that there is no freedom of auditors to disclose any audit findings without prior approval of the management. Finally, a conclusion and recommendation have been made based on the study`s findings.
Factors Affecting Budget Effectiveness in Yeka Sub City Office of Finance & Economic Development
(A.A.U, 2022-02-10) Bemnet Amanuale; Takele Fufa (PhD)
The main purpose of this study was to investigate the factors that affect budget effectiveness in the Yeka sub-city finances and economic development office. The study use explanatory styles of research design with a quantitative research approach. From the total population of 58, censes method was applied to determine sample of 58 respondents from management teams, the internal and external auditors, budget experts, finance officers, tax and planning experts of the selected public organization were the sources for the required data to the researcher through the structured questionnaires. The SPSS version 24.0 was used to analyze the data using descriptive statistics, including mean, standard deviation and multi variable regression used to analyze inferential output. For this study, four independent variables are identify including budgeting planning, budget preparation, budget implementation, and budget monitoring. The dependent variable is budget effectiveness should be measured under multi variable regression. According to the multi variable regression output, Budget planning, Budget preparation, Budget implementation and Budget monitoring and evaluation have a significant effect (positive relationship) on Budget effectiveness. The study concluded that, Budget planning, Budget preparation, Budget implementation and Budget monitoring and evaluation should be embraced since they demonstrated a significant positive relationship with the dependent variable. Furthermore the study recommend, since the effective implementation of budget is not simple matter, it is advisable to exist clear and open budget transparency, communication among managers, workers and departments for better performance and to achieve the goal of the office.
Quality Audit Service Determinant Factors in Private Audit Firm’s in Addis Ababa
(A.A.U, 2021-10-03) Ephrem Assefa; Takele Fufa (PhD)
The objective of this thesis is to investigate and discuss the relationships between Professional qualification, audit experience, industry expertise, and auditor size. The research viewed empirical studies to assess what researchers have done about audit quality issues and identified gaps in the literature where further research is needed, on other determinant factors affecting the audit quality service. The location of this research is one hundred thirty-one private audit firms in Addis Ababa. The primary data was collected by distributing closed-ended questionnaires to one hundred fifty audit staff across fifty-three audit firms. For each of these firms, three survey instruments have been distributed to audit staffs that are in the position of senior, manager, and principal, or partner level. Partial Least Square regression analysis method used to describe and examine the significant relationship between the determinant variables with audit quality. Through the multiple regressions analyses revealed that auditor size, qualification, and industry expertise respectively positive perception and have significant influence however audit experience insignificant contribution on audit quality. So, the researcher believe that this thesis has contributed to auditorsto always keep an alert to improve audit quality by continuous professional development as well audit firms to encourage and support staff to develop their professional development and Accounting and Audit Board of Ethiopia to reviewing and support privately owned firms
The Determinant of Foreign Exchange Rate Volatility on The Financial Performance of Private Commercial Banks in Ethiopia
(AAU, 2024-01-16) Daniel Tsegaye; Alem Hagos (PhD)
The abstract discusses the findings of a study conducted on the determinant of foreign exchange rates on the financial performance of private commercial banks in Ethiopia. The study reveals a significant negative relationship between foreign exchange rates and the financial performance of these banks. This highlights the importance of effectively managing foreign exchange risks for banks operating in Ethiopia. The abstract also suggests a recommendation to increase exports and foreign direct investment in order to enhance foreign currency inflows. By doing so, the study suggests that the impact of fluctuations in foreign exchange rates on banks' profitability could be reduced. This recommendation aligns with the goal of improving the overall financial performance of private commercial banks in Ethiopia. Another interesting finding of the study is a positive and significant relationship between bank size and financial performance. This implies that larger banks may have better risk management capabilities and are more capable of capitalizing on opportunities compared to smaller banks. However, it is important to note that this relationship may not hold true universally, as there are various factors that can influence a bank's financial performance. Generally, the study reveals a significant and negative relationship between interest rate spreads and financial performance. This finding is unexpected because wider interest rate spreads would generally be expected to benefit banks. Further exploration is needed to understand why this relationship does not appear to hold true in the context of the study.In conclusion, the recommendations provided by the study are considered sound and have the potential to enhance the financial performance of private commercial banks in Ethiopia. It would be interesting to observe if these recommendations are implemented and whether they yield positive outcomes for the banking sector in the country. Continued research and analysis in this area could provide further insights into the dynamics of the Ethiopian banking
Determinants of Loan Repayment Performance in Small And Medium Sized Enterprise: The Case of Addis Ketema Sub-City, Addis Ababa, Ethiopia.
(AAU, 2023-06-09) Temesgen Wubetu; Dr. Habtamu Berhanu (PhD)
The Loan Repayment Performance of Small and Medium-Sized Enterprises (Smes) Is Influenced By Various Factors Such As Borrower And Loan Characteristics. Hence, This Study Aims To Examine The Determinants Of Loan Repayment Performance Of Small And Medium Sized Enterprise In Addis Ketema Sub-City, Ethiopia. The Research Used Both Primary and Secondary Data Types. The Primary Data Was Collected Through Questionnaires from Smes Owners Operating in Addis Ketema Sub-City. The Study Determined the Sample Using Taro Yamane Formula, And A Sample Size Of 258 Smes Was Selected from The Total Population Of 726 With 95% Confidence Level And 5% Sample Error. Simple Random Sampling Methods Were Used to Select the Respondents. Data Is Collected Through a Questionnaire Survey, With The Dependent Variable Being Loan Repayment And The Independent Variables Being Borrower And Loan Characteristics. The Study Applied A Quantitative Approach And Uses Descriptive And Inferential Statistics. Binary Logistic Regression Analysis Was Used To Model The Relationship Between The Loan Repayment And Independent Variables. The Study Finds That Gender, Age and Business Experience of the Borrower Do Not Significantly Affect Loan Repayment Of Smes, While Short-Term Loan Has A Significant Effect. Loan Size and Interest Rate Negatively Affect Loan Repayment, With High Loan Size Having a Significant Impact. The Study Conclude That Loan Size, Interest Rate, And Repayment Period Were Significant Predictors Of Loan Repayment Status For Smes. The Study Recommended That Smes with Larger Loans, Shorter Repayment Periods, And Higher Interest Rates Need Additional Support To Ensure Successful Loan Repayment.

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