Term paper a study on Audit risk in promoting financial transparency and accountability Course Title: Research Methodology
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Term paper A study on Audit risk in promoting financial transparency and accountability Course Title: Research Methodology Course Code: 4105 Submitted To: Kanon Kumar Sen Lecturer Department of Accounting & Information Systems Jahangirnagar University Submitted By: Team Alpha
Date of Submission: 28th June, 2023 Table of ContentsIntroduction: 3 Objectives: 4 Literature review: 4 Methodology: 5 Conclusion: 7 References: 8 Introduction:The goal of the study is to thoroughly assess the reason of in Banking sector of Bangladesh that have a substantial impact on the country’s economy. A Nonperforming Loans (NPL) is in default because the borrower has failed to make the necessary payments for the stipulated amount of time (Messai & Fathi,2013). Even though the specifics of default loan status may vary based on the conditions of a certain loan, it is generally known that no payment means that there have been no payments of that particular principal and interest. Default loans frequently occur for several reasons, such as inadequate financial management and supervision, a lack of urgency on the side of lenders, a frail legal system, political pressure, lacks of appropriate corporate governance and a dearth of effective debt-resolution strategies. As noted by (Fajar & Umanto, 2017), a loan is declared default loan when at least 90 days have passed without either the principal or the interest being paid. Furthermore, On the other hand, default loans are those for which the banks are unable to collect the whole principle or interest, most often by the dates provided, and for which there is no probability that settlement will occur soon. But this research is based on the IMF's notion of default loan. Additionally, due to the high inflation rate, shaky fiscal and monetary policies, and growing bank exposure to credit risk, which threatens financial stability, and economic activity. Since rising default loan have a direct effect on the whole banking system, they are regarded as a significant proxy for credit risk. The default loan ratio is one of the strong markers of the start of the financial crisis since it significantly undermines general economic stability by reducing loan expansion. An increasing default ratio is an indication of a financial system that is vulnerable, whereas a declining default loan rate is a sign of sound finances. As per the idea of (Sthembiso Msomi, 2022), high default loan hurt each country's commercial banks as well, which ultimately puts the system as a whole and the country's infrastructure at risk due to the commercial banks' concentrations up to credit risk. Undoubtedly, a steady increase in default loan hurts financial efficiency. Consequently, the possibility of a banking crisis is raised. More specifically, default loan lessen investment opportunities, limit interest income, and exacerbate the financial collapse that is primarily to blame for an economic system's failure. To ensure economic and financial stability, it is necessary to identify the factors that influence default loan. The study also found a strong positive correlation between default loan and both the unemployment rate and the budget of government. According to the research understanding, numerous in-depth studies have been undertaken that have looked at the factors that influence default loan across the country, but none of them has included corruption control score as a contributing factor. The claim explains that this region's financial market differs significantly from that of other nations since it does not suffer from the same problems with corporate governance and financial inclusion that other developed and growing nations do. The study's remaining organizational structure consists of the following. In the literature review section, the research methodology describes the purpose of the research, sampling strategy, and data sources.. Incorporating data sources and research variables, creating hypotheses, demonstrating the econometric framework, and talking about analytical methodologies are all covered in the methodology section. While the conclusion part brings the investigation to a close, the results section presents the findings and evaluates them is feasible to ascertain the important causes of the issue and identify a solution by researching default loans. This study will assist banks in comprehending how the macro environment affects a nation’s economy, enabling them to take action. Additionally, it would help the borrowers understand how default loans are a drawback to a robust financial system. In particular, research on default loan covers a country's whole banking system. Download 47.7 Kb. Share with your friends:
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