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Running head: COMPARISON OF THE RELATIONSHIP BETWEEN BANKING AND ACCOUNTING

Comparison of the Relationship between Banking and Accounting

University of The Bahamas

Natalie Charles

BADM 498

Dr. Kelly Duncanson

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COMPARISON OF THE RELATIONSHIP BETWEEN BANKING AND ACCOUNTING

The article Blockchain Applications in Accounting and Finance written by Kemyani et

al., begins by explaining the concept of blockchain applications in accounting and finance.

Kemyani et al. investigate the state of affairs in this field and the factors causing these

applications to obtain new heights. Blockchain technology can revolutionize the financial sector

by enhancing information sharing and speeding up transaction settlements. The main objective is

to identify current blockchain advances for significant accounting and finance activities in the

banking sector.

Kemyani et al. conducted qualitative research into the banking sector's use of blockchain

technology. Empirical Evidence was gathered through interviews and relevant literature. A study

on the impact of blockchain technology on financial services and information systems is done. A

three-phase approach is used to reach their study aims: the first phase involves collecting

information, phase two consists of analyzing and interpreting the collected data, and the third

phase involves presenting the results. The approach seeks to identify the challenges and

opportunities associated with implementing this technology in the banking, auditing and finance

sectors.

According to Kemyani et al., (2022) there are three features of blockchain technology:

faster settlement, decentralized and better security. Blockchain can improve financial service

delivery by providing high-level data integrity with immediate payment to reduce credit risk

while enabling members to make real-time transactions at a lower cost. Finally, the study

identifies that there is a need in Oman's banking sector for an enhanced accounting framework,

which will lead to better operational effectiveness and efficiency. The findings of the study help

scholars, bankers, and regulators understand blockchain applications in accounting and finance.
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COMPARISON OF THE RELATIONSHIP BETWEEN BANKING AND ACCOUNTING

The article A dynamic network DEA model for accounting and financial indicators

written by Wanke et al., develops and evaluates a busy accounting and economic indicators

model for MENA countries, which is a part of an effort to develop International Financial

Reporting Standards (IFRS) to encourage local financial reporting. The article's objective is not

only to develop IFRS but also to explore the accounting and financial system issues to improve

their efficiency in maintaining accuracy and relevance while increasing understanding of these

systems.

According to Wanke et al. (2019), using a dynamic network creates a relational model.

The importance of an active network DEA model where any key indicator could be narrowed

down concerning accounting and financial indicators is to provide more insight into the

operation of the business. Accounting information provides no understanding of why certain

companies are successful while others fail. This leads us to try new ideas and concepts and test

them to increase profits.

Generally, a new Dynamic Event-Driven Evolutionary (DEA) model is used to explain

fluctuations in accounting and financial indicators. The model can account for the shift in risk

aversion due to changes in investors' preferences and beliefs about investment opportunities

(Wanke et al., 2019). This can potentially improve the efficiency of banks, which are commonly

less efficient under accounting competition because they are forced to report revenue and cost

forecasts at the end of each quarter.

The Financial article accounting in the banking industry written by Beatty & Liao

surveys the current literature on bank accounting by exploring how banks use financial

statements to enhance their reputation, how they support risk management, and what factors

influence the timing of reporting. The first part adapts frameworks such as bankers‫ ׳‬reputation
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COMPARISON OF THE RELATIONSHIP BETWEEN BANKING AND ACCOUNTING

and external views to predict whether a bank will strengthen its capital or liquidity position by

reporting solid performance in future periods. The second part uses these ideas to test whether

banks that make rapid changes in their reported results tend to be more liquid than those with

more minor changes over long periods. The third part presents an empirical analysis of these

hypotheses using a panel data set from 1450 banks operating in 31 countries.

Beatty & Liao (2014) summarize the main findings of studies in the empirical literature

that try to determine if bank financial reporting is responsible for changes in the valuation,

regulatory capital, and earnings management of banks. They found a more substantial

relationship exists between banks' valuation and risk assessments and financial statements

discretion, which help explain how bank earnings are managed in different market conditions.

Finally, they provide recommendations for improving finance sector accounting standards,

investment strategies, technology generation, and regulation.

The literature review presented the article 'Financial accounting in the banking industry

looked at the research on the effectiveness of capital requirements, specific management

concepts and accounting practices, regulatory capital system and their interaction with financial

performance. The role of management accounting is essential to understanding the effect of

capital regulation on financial performance(Beatty & Liao, 2014). Finally, the findings suggest

caution against the use of accounting regulations as a predictive tool for regulatory decision-

making.
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COMPARISON OF THE RELATIONSHIP BETWEEN BANKING AND ACCOUNTING

References

Al Kemyani, M. K., Al Raisi, J., Al Kindi, A. R. T., Al Mughairi, I. Y., & Tiwari, C. K. (2022).

Blockchain applications in accounting and finance: qualitative Evidence from the

banking sector. Journal of Research in Business and Management, 10(4), 28-39.

Beatty, A., & Liao, S. (2014). Financial accounting in the banking industry: A review of the

empirical literature. Journal of Accounting and Economics, 58(2-3), pp. 339–383.

Wanke, P., Azad, M. A. K., Emrouznejad, A., & Antunes, J. (2019). A dynamic network DEA

model for accounting and financial indicators: A case of efficiency in MENA

banking. International Review of Economics & Finance, 61, 52-68.