Financial Reporting, Managing Risk and Banking

The last few years have witnessed tremendous challenges in the management of operational risks faced by banks and the emergence of newer risks. The working models for bank staff are now different; additionally, there has been a massive increase in the digitization level. All these aspects make operational risk management in banks an attractive field of study. There is a need to perform systematic bibliometric analysis in this research area, providing the various trends and highlighting areas for further research analysis. This research paper has examined the various aspects of operational risk management in Banks by performing a thorough bibliometric analysis of 676 articles extracted from two data databases, i.e., Scopus and Web of Science, from 2010 until March 2023. These were analyzed using the tools Biblioshiny and VOSviewer. Various bibliometric techniques like analysis of trends, citations, contributing authors, keywords, and bibliographic coupling have been performed. This research paper has significant theoretical and practical implications which can assist future researchers. Operational risks are ever-dynamic, and five themes, i.e., climate risk, information security risks, geopolitical risks, third-party risks and compliance risks, have been identified in this research paper as key focus areas for conducting research in the future. The findings of this study and suggestions for future research will be useful to academicians, policymakers, and operational risk management professionals for identifying potential areas of collaboration in the future to strengthen the operational risk management framework. Full article

Despite being a crucial source of funding for the government, tax revenue collection in Indonesia has yet to reach its ideal and satisfying level for the economy. Therefore, this study explores the impact of executive incentives, foreign ownership, and transfer pricing on tax avoidance. The conventional banks of Indonesia that were listed on the Indonesia Stock Exchange (IDX) between 2015 and 2019 are the subject of this study. This study employed a purposive selection technique, with a final sample of 17 banks chosen after screening to ensure they met the requirements of having foreign ownership and not having suffered losses during the study year. The results of this study show that while CEO incentives harm tax avoidance, foreign ownership has a beneficial effect. Furthermore, tax avoidance is not significantly impacted by transfer pricing. The findings of this investigation open the door for accountable authorities in the economy. Full article

The study investigates the impact of monetary policy on the level of financial inclusion in the big-five emerging market countries from 2004 to 2020. Several indicators of financial inclusion and the central bank interest rate were used in the analysis. It was found that the monetary policy rate has a mixed effect on financial inclusion, and the effect depends on the dimension of financial inclusion examined. Specifically, a high monetary policy rate has a significant negative impact on financial inclusion through a reduction in the number of depositors in commercial banks. A high monetary policy rate also has a significant positive impact on financial inclusion through greater bank branch expansion. The policy implication is that both contractionary and expansionary monetary policies lead to positive improvements in specific indicators of financial inclusion, because increase in interest rate leads to bank branch expansion which is beneficial for financial inclusion and decrease in interest rate leads to increase in the number of depositors in commercial banks which is also beneficial for financial inclusion. It was also found that the rising monetary policy rate has a negative effect on all indicators of financial inclusion in the post-financial crisis period. Overall, the effect of monetary policy on financial inclusion seem to depend on the monetary policy tool used by the monetary authority and the dimension of financial inclusion examined. The monetary authorities should pay attention to how their monetary policy choices might affect the level of financial inclusion and reduce the benefits that society gains from financial inclusion. Full article

The objective of this case study is to enable students to analyze the financial impact of an unexpected catastrophic event on a retail business and how the strategic operational decisions made in response to regulatory restrictions and changes in tax policy impact the business’s risk tolerance and breakeven analysis. To provide students with a context for comparison, this case study provides students with the opportunity to analyze the financial statements of a retail business prior to the occurrence of an unexpected catastrophic event, how the catastrophic event impacted revenue and profitability, and how the risk reduction strategies the business employed contained the adverse impact of the factors brought on by that catastrophic event on breakeven. This case study addresses a core gap in the body of knowledge by analyzing a business in three distinct stages of the business life cycle: (1) in the start-up phase; (2) in pre-crisis operations mode; and (3) in crisis mode confronted with an unexpected catastrophic event amidst governmental shutdowns, state and federal regulatory restrictions, and emergency changes to the tax policy. Examining a fictitious restaurant (a composite of the sales statistics of three actual restaurants located in Long Island, New York from 2019 to 2021) in operation for one year prior to the COVID-19 pandemic, students are given the opportunity to think critically about how strategic operational decisions made to generate sales, to minimize risk, to comply with mandated state government policy, and to take advantage of federal tax relief policy, collectively changed the financial projections and impacted the breakeven analysis of that business. Students are able to evaluate business start-up costs, first year (pre-pandemic) sales and costs, and second year (during pandemic) sales and costs of a retail business. Students then evaluate how the United States’ federal PPP relief loan program, along with other pandemic relief programs for businesses and individuals, impacted profitability and business strategy. Students also assess risk, risk tolerance, and how the strategies employed to minimize risk impact a business. The motivation for this case study is to provide students with an illustrative example of an entity at various stages of the business life cycle, to explore the surrounding context of the impact of external environmental events, and to identify the effects of strategic operational responses to the various regulatory changes that were brought on by a catastrophic event. This case study is designed for use in courses that study revenue projection, tax, internal controls, breakeven analysis, and risk management. Teaching Note: While this case study uses a restaurant as a model, prior understanding of the restaurant industry is not necessary. Any student or instructor can use their practical knowledge and experience as a consumer to adequately analyze the issues presented. Full article

This study provides an overview of the different dimensions of financial inclusion, its socioeconomic impacts on society’s sustainable development, and future research agendas. Initially, 620 studies were identified using Scopus and other databases, employing keywords such as financial literacy, financial inclusion, financial capability, women’s empowerment, fintech, artificial intelligence, financial accessibility, sustainable development goals, and economic growth. After refinement based on focus and relevance, 325 papers were analyzed in detail for review, primarily focused on India and emerging economies. This review highlights that access to finance by untouched segments of society is essential for sustainable and socio-economic development in developing economies. The official banking system, an effort by the government to assist the financially disadvantaged, can incorporate the impoverished into a formal financial system through campaigns and credit system reforms. Socioeconomic programs reinforce one another and foster the development of children, women, families, and society. This research paper undertakes a systematic literature review primarily focused on relevant articles in broad areas of financial inclusion and its impact analysis and offers a valuable agenda for future research. Full article