Nigeria

Corporate Board Size, Risk Management and Financial Performance of Listed Deposit Money Banks in Nigeria (Published)

This study examined the effect of corporate board size, risk management on financial performance of listed deposit money banks in Nigeria for the period of 2011-2016. The population of the study is fifteen (15) listed deposit money banks in Nigeria out of which a sample of fourteen (14) were used for the study due to the accessibility and availability of data. Corporate board size and risk management as the independent variable was proxy with numbers of board of directors, liquidity risk, credit risk and operating risk, while the return on equity(ROE)  and earnings per share (EPS) were used to proxy financial performance. Data were collected from secondary source through the annual report and account of the banks for the period under study and the data was analysed using multiple panel regression techniques. The findings reveal that board size, credit risk and operating risk are significant negative effect on return on equity (ROE) and earnings per share (EPS) respectively. The study also shows that liquidity risk is negative and insignificant effect on ROE and EPS of the study banks in Nigeria. It is recommended among others that the banks should regulate their risk management practices and ensure they minimize the non-performing loan as it has been found empirically to reduce the quality of the firm’s financial performance. They should also reduce their operational cost for better performance

Keywords: Banks’, Corporate board size, Financial Performance, Nigeria, Risk Management

Effect of IFRS Adoption on Audit Fees of Listed Deposit Money Banks in Nigeria (Published)

We ascertain the effects of International Financial Reporting Standards (IFRS) adoption on the audit fees payable by listed Deposit Money Banks (DMB) in Nigeria. Data for the study was collected from the annual reports of the 15 listed DMBs in Nigeria. The study period spanned two accounting standard regimes: the Nigerian Statements of Accounting Standards (SAS) (2009- 2011) and the IFRS (2012-2014). We analysed the effect of IFRS adoption on audit fees in Nigeria in two ways: first we compared audit fees and the known determinants (audit task complexity and reporting quality) under the two standards regimes using a paired-sample t-test. Second, we employed multivariate analysis to examine and explain the combined effect of audit task complexity, financial reporting quality and IFRS in explaining the change in audit fee following IFRS adoption. We found that audit fees are significantly higher under the IFRS than under the SAS; we also found that IFRS adoption has significantly increased audit complexity and improved financial reporting quality. We conclude that less than 50% of the significant increase in audit fees following IFRS adoption is explained by IFRS task complexities. We recommend further research to ascertain the other factors that could have led to the significant increase in audit fees of DMBs. Lastly, given that the quality of financial reporting increased with IFRS adoption recommend that accountants, regulatory authorities,  professional bodies and all other parties in financial reporting chain should deepen their knowledge of IFRS.

Keywords: Audit Fees, IFRS adoption costs, Money Deposit Banking, Nigeria

The Tenuous Relationship between Oil Revenue and Nigeria’s Economic Growth (Published)

This study examined the relationship between revenue generation and economic growth in Nigeria during the 45-year period, 1971 to 2015. This period heralded the sweet side of global energy crisis that precipitated the petrodollar windfall following steep rise in crude oil prices and the sour side that saw the economy shrink as a result of downward spiral of or crash in global energy prices and/or decline in oil production (slump non-oil boom). Using the ANCOVA model, the study expressed the change in growth rate of GDP as a function of various dimensions of tax, chiefly, change in period lag values of value added tax, personal income tax, company income tax, petroleum profit tax and custom and excise duties with a dummy variable that captures the contribution of oil revenue windfall. The results showed no significant difference in average changes in economic growth between the oil boom and oil slump periods. This suggests that Nigeria’s petrodollar windfall had no significantly stimulating effect on the country’s growth and development trajectory during the 45 years. The findings of this study adumbrate the anecdotal evidence of poor resource governance architecture that has characterized not just Nigeria’s petroleum industry but also the country’s macroeconomic management. The resonance with, and the attendant lesson from, the Dutch Disease Syndrome sequel to the country’s historicity of mismanagement of resources including the petro-dollar windfalls, is the major policy implication of this study

Keywords: Dutch Disease, Nigeria, Oil Boom And Slump, Oil Revenue Windfall, Resource Course, economic growth

The Association between Audit Quality and Earnings Management by Listed Firms in Nigeria (Published)

This study examines the association between audit quality and earnings management by listed firms in Nigeria. The study measures audit quality by audit firm size and earnings management by the absolute abnormal discretionary accruals using the modified Jones model. The study was carried out in two parts, the first part is the comparative study using independent sample t-test and the Wilcoxon signed ranked test. The second part is the multivariate analysis where the association between audit quality and earnings management was examined. Based on our analysis, we found that auditor size has restrained earnings management but the decrease is not statistically significant. The implication of this finding is that users should not blindly assume that high audit quality proxy by the big 4 auditor is a symbol of earnings quality.

Keywords: Audit Quality, Earnings Management, Nigeria, auditor size

Empirical Analysis of Tax Revenue Collection by the Federal Government in Nigeria (Published)

The main objective of this study is to analysis tax revenue collection by the Federal government in Nigeria. The study adopted quantitative research design; the secondary data will be obtained from the FIRS in respect of the total tax revenue collected from the oil and non-oil taxes for the period of 2011-2015. The population of the study is made up of Federal Inland Revenue Services and the sample size is Planning, Reporting and Statistics Departments. The findings from the study revealed that Capital Gains Tax, Stamp Duty, Education Tax and Petroleum Profit Tax are positively significant at 1%, 5% and 10% respectively while Company Income Tax and Value Added Tax are not significant.  However, Company income tax has more total collected revenue than all the remaining variables. Therefore, it is recommended that government should enhance the collection of tax revenue processes and ensure that any deviations from compliance with the laid down rules and regulations are severally dealt with and punished accordingly

Keywords: FIRS, Federal government, Nigeria, Tax Revenue, revenue collection

Corporate Governance and Audit Quality in Nigeria: Evidence from the Banking Industry (Published)

This study examined the relationship between corporate governance and the quality of auditor’s report with evidence from the Nigerian Banking Industry. The research design adopted for this study is the ex-post facto as the research relied on historic data. Eleven (11) deposit money banks quoted on the Nigerian Stocks Exchange were sampled. In testing our hypothesis, the correlation analysis was applied to a dataset covering seven (7) years from 2007 to 2014 that is   the post-corporate governance period. Analysis suggests that while board composition has a negative and insignificant relationship with audit quality, separation of the roles of the CEO from that of the chairman of the board, board size, and composition of the audit committee has positive and significant relationship with audit quality. Furthermore, findings also show that ownership concentration has a positive but insignificant relationship with audit quality. Findings  also show that the strength of the positive linear relationship between the separation of the roles of the CEO from that of the chairman of the board and the audit quality is as high as 0.702377 or 70.23% followed by the relationship between board size and audit quality which stood at 0.452896 or 45.28%. However, the   study thus concludes that effective corporate governance arises out of responsible and simultaneous vigilant actions by the managers, the board of Directors, shareholders and auditors. Good financial Reporting from the external auditors is an important building block of corporate governance because the information provided to the shareholders has to be optimal in terms of cost and benefits. The study also recommends that the relationship between management and shareholders have to be characterized by transparency and fairness.

Keywords: Audit Quality, Board Composition, Board size, Corporate Governance, Nigeria

Effect Of Management Of Receivables Ratio on Corporate Profitability of Industrial/Domestic Products in Nigeria (Published)

This study examines the effect of the management of accounts receivable ratio on the profitability of industrial/Domestic products manufacturing firms in Nigeria.The variables of this study include accounts receivable ratio, debt ratio and sales growth rate. Only secondary sources of data were used for the period 2000-2011. The hypotheses were tested using the multiple regression technique. The results show that accounts receivable ratio, debt ratio and sales growth rate had positive and significant relationship with the profitability of the firms under study 

 

Keywords: Corporate profitability, Industrial and Domestic Products, Management, Nigeria, Receivables Ratio

Does Forensic Accounting Enhance Quality Of Financial Reporting In Nigeria? : An Empirical Investigation (Published)

This study examines the effectiveness of Forensic Accounting in engendering qualitative financial reporting in Nigeria using the banking sector as a reference. The research adopted empirical, survey and descriptive approach. Secondary data for this study were sourced from the annual reports of the chosen banks. Simple five scale binomial ranging from 0-4 were used to analyse the secondary data (financial reporting quality) of the selected banks. Primary data were also sourced to elicit information from accountants using structured questionnaire based on Likert 5-Scale with each containing fifteen questions. A five scale Likert structured questionnaires were administered to a sample size of Two Hundred and Fifty respondents. Respondents were chosen by simple stratification. Pearson’s Correlation Coefficient statistical tool was used to analyse the primary data. The study reveals that the fundamental qualitative characteristics (relevance and faithful representation) of financial reporting accounting and the enhancing qualitative characteristics (understandability) can be significantly enhanced through Forensic Accounting. Analysis of the primary data further attested to the above revelations. To this end, the researcher recommends that relevant regulators of accounting practice in Nigeria such as the Financial Reporting Council of Nigeria and other relevant accounting bodies  should ensure that  forensic accounting be deeply entrenched to enhance the quality of financial statements and indeed  the financial reporting system in Nigeria. Key industrial regulators such as the Central Bank of Nigeria, NDIC, SEC and so on should at regular intervals commission forensic accounting to ensure compliance on the key variables such as relevance, faithful representation, understandability and so on by the annual reports submitted to them by agencies of government and the organised private sector. They should also train and re-train their members on the intricacies of forensic accounting as regards these variables to enhance the utility capital providers and other stakeholders derive from financial reporting in Nigeria.

Keywords: Financial Reporting Enhancement, Forensic Accounting, Nigeria

Efficiency and Accountability of Public Sector Revenue and Expenditure in Nigeria (1970-2014) (Published)

Nigeria is the sixth largest producer of oil and gas in the world, but the average Nigerian on the street is poor and there is poor infrastructure like power supply, roads, hospitals etc. This study examines the efficiency and accountability of public sector revenue and expenditure in Nigeria (1970-2014). Data on total federal government revenue and expenditure, state governments’ revenue and expenditure were collected from Statistical bulletin from the Central Bank of Nigeria from 1970-2014. The results were analysed using relevant statistical tools. The findings reveals that the level of accountability is very poor in Nigeria because the attributes of accessibility, comprehensiveness, relevance, quality, reliability and timely disclosure of financial information, social and political information about government activities are completely non available or partially available for the citizens to assess the performance of public officers mostly the political office holders. Conclusively and evidently the study has revealed that there is significant relationship between efficiency of public sector expenditure, recurrent expenditure and capital expenditure in Nigeria from 1970-2014. On the basis of these, the paper recommends among others that for accountability to be successful in the management of public funds in Nigeria there must be a reduction in the level of corruption, improving public sector accounting and auditing standards, legislators as champions of accountability and restructure the public accounts committees and the value of money must be applied in the conduct of government business.

Keywords: Accountability, Financial Reporting, Financial Resources, Management, Nigeria, Public Finance, Public Sector Accounting

Analysis of the Relationship between Human Capital Development and Economic Growth in Nigeria (Published)

This research examined the effect of human capital development on the growth of Nigeria economy. The objectives of the study include to: (i) determine the extent to which significant long-run relationship exist among the human capital development and economic growth in Nigeria, (ii) determine if expenditure on education has significant effect on economic growth in Nigeria, (iii) investigate if expenditure on health has significant effect on economic growth in Nigeria. Using co integration techniques to investigate the effect of human capital development and economic growth in Nigeria, we obtained the following results. (i) there is significant long-run relationship between human capital development and economic growth in Nigeria. This is confirmed by the Johansen co-integration. (ii) It was estimated from the VECM, 1% increase in the government expenditure on education (TEDU), on the average led to 23.8% increase in GDP while. 1% increase in the government expenditure on health (THEA) caused 37.6% decrease in GDP. (iii) The two variables as human capital development factor were found to have significant effect on economic growth. However, government expenditure on education has positive relationship with GDP. This implies any increase in expenditure on education contributes positively to the growth of the economy. Based on the findings, the policy implications are in three directions (i) to retain the continuous long run relationship with GDP and human capital development, effort should be made to harmonize the activities in the health and education sector with much attention on funding. The harmonization of the activities in these two sectors will have long run effect on the economy. (ii) as one of the factors of human capital development, government expenditure on education was found to have positive effect on the economy. In the light of this, government should try as well to meet up with world standard benchmark on education expenditure in the annual budget. In so doing, this will improve on the economy. (iii) government expenditure on health was found to have negative effect on the economy. Therefore, effort should be made by government to address the agitations by the health workers which always make them to resort to frequent strike actions. If these worrying issues are addressed, the instability experienced in the health sector will be solved. This will go the long way promoting the economy. More so, efforts should be made to equip our health sector so that capital flight in the name of foreign medical treatment is reduced.

Keywords: Government Expenditure on Education, Government Expenditure on health, Human Capital Development, Nigeria