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Author(s):
Editor in Chief.
Page No :
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African Journal of Accounting and Financial Research, Volume 7 Issue 2, Cover Page
Abstract
African Journal of Accounting and Financial Research, Volume 7 Issue 2, Cover Page
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Author(s):
Dorathy Christopher Akpan, Patrick Edet Akinninyi , Precious Essang Inwang.
Page No : 1-15
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Effect of Environmental Disclosure on Cost of Equity of Listed Consumer Goods Firms in Nigeria
Abstract
As concerns about climate change, pollution and resource scarcity intensifies, stakeholders are placing greater emphasis on the environmental practices of organisations. Based on this, the study examined the effect of environmental disclosure on the cost of equity of listed consumer goods firms in Nigeria. Ex-post facto research design was adopted, and panel data covering ten (10) years (2013-2022) were collected across eighteen (18) listed consumer goods firms in Nigeria which formed the sample size of the study. The data collected were analysed using panel multiple regression analysis via E-views 10.0 statistical package. The study findings revealed environmental risk disclosure (Coeff. = -0.0269{0.0107}) and waste management disclosure (Coeff. = -0.0178{0.0009}) have significant negative relationships on cost of equity (COE) of listed consumer goods firms in Nigeria while greenhouse gas emission disclosure (GGED) has an insignificant negative effect (Coeff. = -0.0075{0.3966}) on cost of equity (COE) of listed consumer goods firms in Nigeria. It was thus concluded that environmental accounting disclosure plays a crucial and significant role in shaping the cost of equity of listed consumer goods firms in Nigeria. The study recommended, amongst others, that regulatory bodies and industry associations should advocate for the integration of robust waste management disclosure strategies within corporate reporting frameworks to mitigate environmental impact and promote sustainable business practices.
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Author(s):
Ibrahim Musa, El-Yaqub Ahmad. B., Sule Magaji.
Page No : 16-33
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Nexus Between Financial Liberalization and Economic Growth in Nigeria (1987-2022)
Abstract
This study examines the influence of banking sector liberalization on economic growth (GDP) in Nigeria by employing the Ordinary Least Square (OLS) approach. Findings from the study show a positive association between the measurement of financial deepening (FD); which implies that greater financial liberalization (FLB) aligns with GDP. A more robust domestic currency results in diminished GDP. The result further indicates a positive correlation between FDM and GDP signifying that a unit increase in FDM results in a 0.012070 unit increase in GDP, a unit increase in exchange rate (EXR), leads to a decrease of 4,705.546 unit in GDP and a unit increase in inflation (INF) leads to 5,428.744 unit increase in GDP. Therefore, the study recommends that it is essential to maintain a balanced approach to EXR management and policies should aim for stability to support GDP while considering the impact on international trade competitiveness.
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Author(s):
Uche Okoro Orji (Ph.D.).
Page No : 34-45
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Moderating Influence of Corruption on the Relationship between Aggregate Tax Revenue and Economic Development in Nigeria and Ghana
Abstract
The study examines the moderating influence of corruption on the relationship between aggregate tax revenue and economic development in Nigeria and Ghana. Ex-post facto research design was adopted for the study where country specific data extracted from the annual publications of OECD database on tax revenue in Africa, Central Bank of Nigeria and Transparency International (TI) for the periods 1981 to 2022 were used. The dependent variable was economic development measured with Gross Domestic Product at 2015 Constant price while the independent variable was Aggregate tax revenue. The relationship between the dependent and independent variables was moderated by the presence of corruption measured by Corruption perception index for Nigeria and Ghana. Different econometric techniques were applied in the study while the data was analyzed by means of the Autoregressive Distributed Lag (ARDL) model using E views Version 10. The findings showed that in Nigeria and Ghana, aggregate tax revenue had a positive and significant influence on economic development both short and long run whereas corruption had a negative but significant influence on the relationship between tax revenue and gross domestic product of Nigeria and Ghana. The study therefore recommends among others that the respective governments of Nigeria and Ghana should put in place adequate fiscal measures to ensure that revenue generated from taxes are effectively utilized to develop their economies. They should also see the need to tackle corruption in the process of executing projects by ensuring that activities of bad and corrupt leaders are closely monitored through further strengthening the hands of the anti Graft Agencies like the Economic and Financial Crimes Commission (EFCC) and ICPC to have the political will to persecute corrupt leaders and managers of public funds.
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Author(s):
Anderson Emmanuel Oriakpono (Ph.D.), Sowunmi Bolanle Musiliu.
Page No : 46-69
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The Influence of Nigeria’s Level of Public Debt on the Country’s Ability to Sustain Fiscal Stability
Abstract
This research investigates the impact of public debt exposure on Nigeria's fiscal sustainability through an ex post facto research design. The study utilizes quarterly data from 1986 to 2021, comprising 36 data points sourced from the Central Bank of Nigeria (CBN) and World Bank databases. Employing descriptive statistics, unit root analysis, Johansen co-integration, and Vector Error Correction techniques, the analysis maintains a significance level of 5%. The model exhibits a satisfactory fit with an R-squared value of 0.67 and an Adjusted R-squared value of 0.65. Key factors, including the domestic debt to GDP ratio, external debt to GDP ratio, debt servicing to GDP ratio, economic growth, exchange rate, and interest rate, undergo evaluation for their impact on Nigeria's current account balance and budget deficit/surplus. The findings highlight the external debt to GDP ratio, debt servicing to GDP ratio, economic growth, exchange rate, and interest rate as primary determinants of Nigeria's fiscal responsibility. The study recommends several measures based on these findings. These include managing external debt effectively, prioritizing debt servicing, promoting economic growth, monitoring exchange rates and interest rates, strengthening debt management practices, diversifying revenue sources, enhancing budget discipline, and improving governance.
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Author(s):
Olayemi Omowumi Ayoola-Akinjobi.
Page No : 70-86
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Block Chain Technology, Cryptocurrency and Revenue Generation: A Systematic Review
Abstract
The huge debt profile of Nigerian government dictates the need to look for alternative means of financing. This paper explored how the Nigerian government can increase its revenue through block chain technology and crypto currency. The study adopted a qualitative research approach by reviewing related literatures. The study concluded that even though crypto currency was not recognized as legal tender in Nigeria, the government can take advantage of the emerging and growing market of crypto currency by taxing it, this study recognized the fact that Nigeria government just enacted an act imposing 10% capital gain tax on digital assets including crypto currency, the government can still do better. It therefore recommended that Nigeria government should adopt the USA model of taxing crypto currency whereby not only capital gain tax would be charged, but also income tax and value added tax; thereby increasing the total revenue generated from this avenue.
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Author(s):
Oluwaseun Grace Obisesan (Ph.D.).
Page No : 87-103
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Currency Devaluation and Economic Growth in Nigeria
Abstract
This study examined currency devaluation and economic growth in Nigeria. Specifically, the study economic growth, balance and external debt on currency devaluation in Nigeria and tracked the direction of causality between currency devaluation and real economic variables in Nigeria. The study adopted the qualitative and quantitative research design. Secondary time series data covering 1990 to 2020 were obtained in the study. Estimation methods used in the study’s analysis includes descriptive statistics, correlation analysis, ARDL Co-integration analysis, parsimonious error correction model, granger causality test and other post estimation tests. Findings from the study revealed that gross domestic product exert positive significant impact on currency devaluation captured with currency devaluation both in the short and long run; balance of trade exert positive significant impact on Nigeria currency devaluation both in the short run and insignificant positive impact in the long run; external debt exerts negative significant impact on Nigeria currency devaluation in the short run; and positive significant impact in the long run; and a unidirectional relationship exists between external debt and currency devaluation, balance of trade and currency devaluation, external debt and balance of trade respectively. Premised on these findings, the study advocated that government in collaboration with monetary agencies should seek sound measures to reduce import and encourage exports towards maintaining positive trade balance and improve economic growth; government should create and introduce economic reforms or macroeconomic policies targeted at causing friendly business environment, boost economic output and improving the performance of the economy and government and the Central Bank of Nigeria should ensure debts contracted are deployed towards encouraging investment in exportable goods and services.
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Author(s):
Marcellina Ene Dominic.
Page No : 104-120
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Financial Accounting Controls and Financial Reporting Quality: An Empirical Analysis of Public Educational Agencies in Nigeria
Abstract
This study examined financial accounting controls and financial reporting quality: an empirical analysis of public educational agencies in Nigeria. This study adopted a cross-sectional descriptive survey design because it provides a clear outcome and the characteristics associated with it at a specific point in time. The target population for this study constituted the total number of employees in the accounting/finance, administration, and operations departments in the four educational examination agencies. The number of staff in the accounts/finance, administration, and operations departments in the four regulatory agencies totaled one hundred and thirty-seven (137). The sample size derived with the Cochran sample size derivation statistic yielded one hundred and one (101). For this study, primary data was employed. The data were collected with the aid of a questionnaire that was properly drafted using the 5-point Likert scale for the questionnaire. The study adopted the use of frequency tables and percentages to analyze the questions and employed linear regression with the application of the ordinary least squares to test the hypotheses of the study. The major findings that were extracted from the analysis reveal that detective accounting controls have a significant effect on the financial reporting quality of selected educational regulatory agencies in Nigeria and preventive accounting controls have no significant effect on the financial reporting quality of selected educational regulatory agencies in Nigeria. It is therefore the recommendation of the study that regulatory agencies should sustain the use of detective accounting control systems through proper optimization and regulatory agencies should ensure they make consistent periodic financial reconciliations as a complement to preventive accounting control.
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Author(s):
Oluwatosin Adejoke Osanyinbola.
Page No : 121-132
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Technology-Based Forensic Auditing and Financial Crime Detection: An Empirical Analysis of Deposit Money Banks in Nigeria
Abstract
The advent and rapid rate of technological development have prompted various fields of study to receive a new touch. One of those fields of study that has been revamped by the technological revolution is accounting. This study examined technology-based forensic auditing and financial crime detection: an empirical analysis of deposit money banks in Nigeria. The research design adopted in the study is the survey design. The survey design was adopted because the data for the study was extracted through the primary method of distributing questionnaires to the respective respondents. The population of the study is made up of the accounting staff of some selected deposit money banks in Abuja, Nigeria. The total population is made up of 58 persons. The method that was used in collecting data for the study was the questionnaire instrument. The questionnaire was distributed to the respondents to extract specific information in line with the objectives of the study. The method of data analysis that was used in this study is multiple linear regression with the application of the Ordinary Least Squares (OLS) technique. The findings of the study reveal that technology-based forensic auditing contributes significantly to financial crime detection in selected deposit money banks in Nigeria. The implication of this finding is that deposit money banks have already embraced and started applying technologically based forensic auditing in their financial crime explorations. It is therefore the recommendation of the study that auditors should stay abreast of the updates of other technological forensic auditing tools and step up their financial intelligence skills by embedding textual analysis in audit engagement to sharpen their skepticism for proper audit evidence and also favorably influence the technological forensic audit quality.
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Author(s):
Akadi Omolara V., Akinleye Gideon T. (Prof.).
Page No : 133-149
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Forensic Accounting and Corporate Fraud in Deposit Money Banks in Nigeria
Abstract
This study examined forensic accounting and corporate fraud in Nigerian deposit money banks. The components of the study state that ten employees were randomly selected from ten banks, which represented all of the Deposit Money Banks in Ekiti State, Nigeria. As a result, a purposive sample technique was used to select the Head of Operations, Fund Transfer Officer, Resident Internal Control Officials, and Cash Officials. A self-structured questionnaire used to collect the required data from the respondents underwent a validity and reliability test. Using Cronbach Alpha, the study's dependability coefficient was 0.782, which was considered high. The collected data was examined using multiple regression. In deposit money banks, it was discovered that forensic observation, 0.339 (p=0.041<0.05), 0.530 (p=0.001<0.05), and 0.341 (p=0.013<0.05) respectively, benefited from forensic interview, forensic interrogation, and forensic observation. Furthermore, a positive and significant effect on fraud detection and prevention in deposit money institutions was observed for forensic review, forensic inspection, and forensic documentation, to the tune of 0.291 (p=0.036<0.05), 0.603 (p=0.000<0.05), and 0.611 (p=0.00<0.05), respectively. In terms of fraud detection and prevention, it has been shown that forensic litigation and investigation play a significant role in corporate fraud. Therefore, it was suggested that deposit money institutions use trained forensic accountants who are skilled in implementing the appropriate deterrent measures in order to stop fraud before it starts. This type of research could be expanded to include additional businesses from various industries.
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Author(s):
Anderson Emmanuel Oriakpono, Dagwom Yohanna Dang.
Page No : 150-165
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Effect of Public Finance Implications on The Economic Standard of Nigerians: A Longitudinal Study
Abstract
This study examined the impact of the national budget, exchange rates, trade openness, inflation rates, and interest rates on the purchasing power parity and per capita income of Nigeria during the period spanning from 2009 to 2022. Data was gathered from the Central Bank Nigeria and the World Bank. The data was further analyzed using descriptive statistics and Ordinary Least Square methods at a significance level of 5% for the purpose of detailed estimation. Results of the study showed that the national budget, exchange rates, trade openness, inflation rates, and interest rates had significant and positive impacts on Nigeria’s purchasing power parity and per capita income. The results of the study imply that, to increase the purchasing power parity and per capita income of Nigerian citizens, the government should focus on improving the quality of budget execution, ensure exchange rate stability, implement more trade policies that will open the Nigerian market and increase foreign investment, focus on maintaining a low inflation rate, and ensure the stability of
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Author(s):
Umar Mohammed Tela, Bashir Muhammed Abdullahi, Muhammad Muhammad.
Page No : 166-180
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Exploring Global Takāful Participation: Implications for Nigeria’s Financial Inclusion and Economic Sustainability.
Abstract
This qualitative study is intended to investigate the global landscape of Takāful participation with a specific focus on its potential implications for enhancing financial inclusion and contributing to the economic sustainability of Nigeria. The study employs content analysis techniques to systematically examine scholarly literature, industry reports, and policy documents. It aims to reveal recurring themes, emerging trends, and strategic insights related to Takāful practices worldwide. Findings indicate detailed patterns and trends in Takāful participation globally, emphasizing its potential impact on financial inclusion, particularly for marginalized populations. The study provides practical implications for policymakers, industry stakeholders, and researchers, offering evidence-based insights into integrating Takāful within Nigeria's financial landscape. The identified patterns and trends serve as practical guidance for policymakers aiming to leverage Takāful to address financial inclusion challenges, which contributes to the discourse on fostering economic sustainability in Nigeria through Takāful integration.
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Author(s):
Odoemela Obinna Uche, Ibelegbu Geraldine Ezioma, Ulonnamefula, Chidera Chukwuebuka.
Page No : 181-196
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Unveiling the Effects of COVID-19 on the Efficiency of Nigerian Banks.
Abstract
This study investigated the impact of Covid-19 on the efficiency of Nigerian banks. The study especially examined the effects of Covid-19 on the capital adequacy ratio (CAR), asset quality, management quality, earning potential, and liquidity of Nigeria's money deposit banks (MDBs) both before and after the outbreak. The project employed a longitudinal survey research approach. Data was taken from the banks under study's audited financial statements for the years 2017 through 2020. The descriptive statistic of percentage and bar charts were utilized in analyzing the financial figures while the Sample T-test and the Wilcoxon Statistical Test were used via SPSS in testing the formulated hypotheses. Following a series of empirical tests, it was discovered that banks' capacity to generate money and the quality of their assets both increased more during the COVID-19 epidemic. The outcome also demonstrates that banks' capital adequacy (CAR), management effectiveness, and liquidity were most significantly impacted by the covid-19 problem as their values declined in comparison to before the epidemic. Consequently, the study recommended that banks should plan and prepare for eventualities like that of the covid-19 in the future so as to be better prepared in innovating new measures to run and sustain their operations in the face of such eventualities.
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Author(s):
Irejeh Enaikpobomene Mina, Catherine Chimma Obasi (Ph.D.).
Page No : 197-209
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Credit Risk Strategies and Revenue Growth of Selected Shipping Companies in Nigeria.
Abstract
This study examined the impact of credit risk strategies and revenue growth of selected shipping companies in Nigeria from 2012-2022. Using Revenue Growth (Proxied by Net Profits of Selected Shipping Companies) as the dependent variable, the tool used for model estimation and analysis is the Ordinary Least Squares regression technique. From the results of the study, non-performing loans impacted negatively and significantly on revenue growth while revenue to assets ratio had a positive and significant impact on the revenue growth. The study thus recommends, in addition to other policy suggestions, stakeholders ought to push for the creation and improvement of regulatory frameworks that offer standards for efficient credit risk management in the maritime industry.
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Author(s):
Heriel Emanuel Nguvava (Ph.D.), Glory Festo Makundi.
Page No : 210-222
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Implication of Transfer Pricing Scheme on Manufacturing Companies’ Profitability in Tanzania: A Case of Dar es Salaam Stock Exchange.
Abstract
The main objective of the Study was to assess the implication of transfer pricing scheme on manufacturing companies’ profitability in Tanzania. Specifically aimed to determine the cause and effect relationship of interest payments on related party loans, payment of service fee on intercompany services and royalty payments for the use of related party intangible properties on manufacturing companies’ profitability. The study adopted a positivism philosophy and adopted deductive reasoning. The secondary data was collected from 4 manufacturing firm’s annual report for the period of 2013 to 2022. The study used multiple linear regression for data analysis and this was done through STATA software version 14.2. The study findings show that Interest payments on related party loans has significant negative effect on manufacturing companies’ profitability. Furthermore, the result shows that payment of service fee on intercompany services has no significant effect on manufacturing companies’ profitability. Finally, Royalty payments for the use of related party intangible properties has significant positive effect on manufacturing companies’ profitability. Current study recommends that, for companies to comply with relevant transfer pricing regulations, close supervision by taxing authority (TRA) is considered necessary to reduce unhealthy transfer pricing practices. Also, study recommends that interest payments on related party loans should be set at values that would not negatively impact the financial performance of manufacturing firms in Tanzania. Related party companies should set transfer price to reflect the ALP (arm’s-length price) that unrelated parties would agree to in the same circumstances for transfer or use of similar intangible property. Moreover, the study recommends government to put in place monetary policies that will facilitate financial performance of listed manufacturing companies and ensure proper regulation of the financial institutions so as to provide adequate credit facilities for the manufacturing firms in Tanzania.
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Author(s):
Joseph Akam Mpuon , Dorothy Oyo – Ita.
Page No : 223-245
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Supply Chain Service Quality and Customers Satisfaction in Nigerian Airports.
Abstract
The study examined supply chain service quality and customers’ satisfaction in Nigeria Airports: a case study of Calabar Airport. The specific objectives are to examine the relationship between supply chain service quality reliability, service quality responsiveness, service quality tangibility, service quality empathy, service quality assurance and customer satisfaction in Nigeria Airport. Survey design was employed in the study. Data information for this research work were collected from primary source. The study employed correlation coefficient analysis to measure the degree of relationship between variables tested in the study. The major findings of the study revealed that a significant relationship exist between supply chain service quality reliability, service quality responsiveness, service quality tangibility, service quality empathy, service quality assurance and customer satisfaction. The study recommended that supply chain managers in Nigeria Air ports should adopt the dimensions of supply chain service quality discussed in the current article to provide effective customer service that addresses the needs and requirements of customers in Nigeria Airport. Management of Nigeria Airport should be prudent in monitoring and encouraging the activities that create customers satisfaction.
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Author(s):
Adedeji D. Ajadi, Adeoye Afolabi.
Page No : 246-259
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The Persistence of Equity Mutual Fund Performance: Further Evidence from an Emerging Economy.
Abstract
This study evaluates the persistence of performance of actively managed, equity-based mutual funds in Nigeria using monthly net asset values (NAVs) of 30 funds obtained from the Securities and Exchange Commission over 10 years from 2012 to 2021. We employed a non-parametric technique based on the Contingency Table to test for performance persistence, using the Cross-Product Ratio (CPR) and the Rank Correlation statistics. Evidence shows that mutual funds do not exhibit performance persistence, and the performance of loser funds does not repeat, hence past performance does not predict future performance. Therefore, we recommend that retail investors (and their advisers) should not rely on historical performance to select mutual funds as an investment vehicle. This study provides valuable insight into the performance of actively managed funds in Nigeria and contributes to the ongoing debate about the efficiency of the financial markets and the role of active fund management. It suggests that investors might be better off with passive investment management strategies, given the lack of persistence of performance of actively managed funds.
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Author(s):
Adedeji D. Ajadi.
Page No : 260-275
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Selective and Market Timing Skills: An Empirical Evaluation of Equity Mutual Funds in an Emerging Market.
Abstract
This study evaluates the selective and market timing skills of mutual funds managers using monthly net asset values of all 30 actively managed equity-based funds that operated from January 2012 to December 2021 obtained from the Securities and Exchange Commission. Selectivity is the ability to search for and choose undervalued securities to exploit the sub-optimal market weights of securities, while market timing is the ability to forecast the direction of the market and adjust portfolio betas to generate alpha. Two regression models, namely the Treynor-Mazuy (1966) and Henriksson-Merton (1981) were deployed for the study. The findings indicate that mutual funds did not exhibit significant selective skills or market timing abilities. This outcome is consistent with the Efficient Market Hypothesis (EMH). Consequently, it becomes challenging for investors or fund managers to consistently outperform the market through stock selection or market timing. Based on the study's results, the recommendation for investors is to consider low-cost passive investment strategies, such as index funds or exchange-traded funds (ETFs), over actively managed funds.
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Author(s):
Appah Ebimobowei (Ph.D.), Tekerebo Izonebi Joyce.
Page No : 276-305
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Internal Audit Practices and Financial Reporting Quality of Listed Manufacturing Firms in Nigeria: The Role of Audit Committee.
Abstract
The purpose of this study was to investigate the moderating role of audit committee on the association between internal audit practices and quality of financial reporting of listed consumer goods manufacturing firms in Nigeria. The study used cross sectional and correlational research designs with a population of twenty-one (21) while a sample of ten (10) listed consumer goods manufacturing firms were used for the study. Primary data from structured questionnaires were used for data collection after validity and reliability tests while the responses obtained from the questionnaires were analysed using univariate, bivariate and multivariate analysis of data.. The findings indicate a positive and significant relationship between internal controls, audit risk assessment, internal audit independence on quality of financial reports. The study further revealed that audit committee moderates the association between internal audit practices and quality of financial reports. On the basis of the findings, the study concluded that audit committee moderates internal audit practices and financial reporting quality of listed consumer goods firms in Nigeria. Consequently, the study recommended amongst others that Internal audit departments of Consumer goods manufacturing firms should adopt and employ internal control measures like segregation of duties, restricted access through using access passwords that are frequently changed in evaluating earning per share, this gives opportunity to professional to study, understand, and apply new development on auditing procedures and dissemination of relevant financial information which will enhance financial reporting quality.
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Author(s):
Appah Ebimobowei (Ph.D.), Isele Lilian Ebikemefa.
Page No : 306-325
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Taxes and Road Infrastructural Development in Nigeria.
Abstract
This study examined the taxes and road infrastructural development in Nigeria. The specific objectives of the study among others were to determine the relationship between of company income tax on road infrastructural development in Nigeria, ascertain the relationship between petroleum profit tax on road infrastructural development in Nigeria. Four research questions and four hypotheses were formulated as a guide for the study. This study adopted ex post facto research design. The population of the study was conducted on Federal Republic of Nigeria under the National Bureau of Statistics, Federal Inland Revenue Services, Central Bank of Nigeria (CBN) and Federal Ministry of Finance. The study period covered was forty-one (41) years spanning from 1982 to 2022. This study utilized Descriptive statistic, Unit Root Test and Ordinary Least Square Regression method with the aid of E-View 12. The findings of the study showed a positive and significant relationship between company income tax on road infrastructure in Nigeria; customs and excises duties positively and significantly affects road infrastructure in Nigeria; petroleum profit tax negatively and insignificantly affects road infrastructure in Nigeria and finally, value added tax negatively and insignificantly influence road infrastructure in Nigeria is statistically negative and insignificant. The study concluded that taxes such as company income tax, custom and excise duties affects road infrastructural development in Nigeria for the period spanning from 1982 – 2022. Therefore, the study suggested amongst other that, government should intensify efforts at developing the level of infrastructure in the country through tax payers revenue because, this study affirmed that company income tax and customs and excise duties positively and significantly affects road infrastructure in Nigeria
