Regulatory agencies and creative accounting practices in Nigeria

  • Received February 20, 2020;
    Accepted June 3, 2020;
    Published October 12, 2020
  • Author(s)
    Paul Olojede
    ORCID , Francis Iyoha ,
    Ben-Caleb Egbide
    ORCID Researcher ID ,
    Olayinka Erin
    ORCID
  • DOI
    http://dx.doi.org/10.21511/ppm.18(3).2020.38
  • Article Info
    Volume 18 2020, Issue #3, pp. 465-478
  • TO CITE АНОТАЦІЯ
  • Cited by
    8 articles
  • 1287 Views
  • 1284 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Regulation and regulatory agencies are to serve as external control mechanisms to ensure that the financial statements provide a fair view of the company’s operating performance and financial position, free of any unethical practice and suitable for all stakeholders’ needs. Despite the increasing importance of regulatory agencies in enforcing compliance with the standards and laws, it occupies a limited space in accounting research. This study, therefore, investigated the impact of regulatory agencies on creative accounting practices. The study used descriptive and survey research design to achieve its aim. It employed a multi-stage sampling technique, also questionnaires were distributed among 405 respondents consisting of preparers of accounts, users of accounts, and regulators. Out of the number distributed, the respondents returned 241 copies, and all of them were found suitable. The study used Ordinary Least Squares (OLS) to analyze the data and test the hypothesis. The empirical findings showed that the regulatory agencies jointly show a significant impact on creative accounting practices, but the level of contribution to the overall impact by each regulatory agency varies. The study concludes that Nigeria’s regulatory agencies are weak and inefficient in enforcing compliance with the relevant rules. The study recommends that the institutional capacity of the regulatory agencies should be strengthened by enforcing compliance with financial reporting rules and regulation. Most of these agencies should develop capacity in the areas of manpower, information technology infrastructures, and funding.

Acknowledgment
The authors acknowledge Covenant University who has solely provided the platform for this research and has also fully sponsored the research cluster search for data across the country.

view full abstract hide full abstract
    • Table 1. Independent variables descriptive statistics summary
    • Table 2. Correlation matrix
    • Table 3. Regression results
    • Conceptualization
      Paul Olojede
    • Data curation
      Paul Olojede
    • Methodology
      Paul Olojede
    • Project administration
      Paul Olojede, Ben-Caleb Egbide
    • Resources
      Paul Olojede, Olayinka Erin
    • Writing – original draft
      Paul Olojede
    • Supervision
      Francis Iyoha, Ben-Caleb Egbide
    • Validation
      Francis Iyoha, Ben-Caleb Egbide
    • Writing – review & editing
      Francis Iyoha, Ben-Caleb Egbide, Olayinka Erin
    • Software
      Olayinka Erin
Related Articles

  • IFRS convergence: opportunities and challenges in India

    Parvathy P. R. doi: http://dx.doi.org/10.21511/afc.01(2).2017.02
    Accounting and Financial Control Volume 1, 2017         Issue #2         pp. 13-18 Views: 3801 Downloads: 1719 TO CITE

    Past decade has witnessed several changes in the process of conduct of business activities across the world especially due to the wave of globalization. It has also made drastic changes in the process of financial reporting, in particular the continuing adoption of IFRS (International Financial Reporting Standards) worldwide. IFRS are high quality, understandable, enforceable and globally acceptable accounting standards issued by IASB (International Accounting Standard Board). Thus these are a set of international accounting standards stating how a particular type of transaction and other events should be reported in the financial statements. Thus IFRS are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. IFRS is becoming the global language of business with over 40% of the world adopting this as their standard for reporting. India also decided to converge to IFRS from 1st April 2016 in a phased manner, which in turn improves the financial statement comparability and transparency that helps to attract greater cross border investments. This paper focuses on the convergence of IFRS with Indian Accounting Standards, its utility, issues and challenges faced by the stakeholders. It also throws light to the ways through which problems can be addressed.

  • Corporate governance and financial performance: an empirical analysis of selected multinational firms in Nigeria

    Gideon Tayo Akinleye , Odunayo OlarewajuORCID Researcher ID, Bamikole Samson Fajuyagbe doi: http://dx.doi.org/10.21511/ppm.17(1).2019.02
    Problems and Perspectives in Management Volume 17, 2019         Issue #1         pp. 11-18 Views: 3410 Downloads: 570 TO CITE АНОТАЦІЯ

    This study focused on corporate governance and performance of selected Nigerian multinational firms from 2012 to 2016. Specifically, the study focused on the effect of board size, activism and committee activism on return on asset and firm growth rate. Secondary data collected from four multinational firms were analyzed via static panel estimation techniques. While board size and board activism exerted significant negative impact on return on asset, committee activism exerted insignificant impact. The results of the study further showed that board size and board activism exert insignificant negative impact on firm’s growth rate, while committee activism insignificantly spurs firm’s growth rate. Decisively, discoveries from this study reflect that corporate governance has significant negative impact on return on asset, but has insignificant influence on the growth rate of Nigerian multinational firms. Based on these findings, the authors recommended that corporate governance dynamics in firms world over should be reconsidered, such that it gives credence to more than just numbers of persons or meetings held, but the main reasons and deliberations in such meetings. It was also recommended that excessive increase in magnitude or frequency of meetings held by board of directors cum committee should be avoided.

  • Impact of corporate governance mechanisms on financial reporting quality: a study of Indian GAAP and Indian Accounting Standards

    Faozi A. AlmaqtariORCID Researcher ID, Abdulwahid Abdullah HashedORCID , Mohd ShamimORCID , Waleed M. Al-ahdal doi: http://dx.doi.org/10.21511/ppm.18(4).2020.01
    Problems and Perspectives in Management Volume 18, 2020         Issue #4         pp. 1-13 Views: 2961 Downloads: 612 TO CITE АНОТАЦІЯ

    The present study examines the impact of corporate governance mechanisms on financial reporting quality under Indian GAAP and Indian Accounting Standards (Ind. AS). A sample of 97 companies listed on the Bombay Stock Exchange is selected. Corporate governance mechanisms have been considered as independent variables, and financial reporting quality is the dependent variable. Corporate governance is measured by board effectiveness (board size, independence, diligence, and expertise), audit committee attributes (size, independence, diligence, and expertise), foreign ownership, and audit quality. Descriptive statistics, correlation, and OLS regression are conducted to estimate the results. The study results reveal that board characteristics and audit committee attributes, except for audit committee diligence, have a significant effect on financial reporting quality. However, the impact of board diligence and audit committee attributes is negative. Foreign ownership has no contribution to financial reporting quality, but audit quality has a significant effect. The findings of the study have considerable implications for regulators, policymakers, managers, investors, analysts, and academicians. More emphasis should be given to compliance with Ind. AS, and an oversight body for compliance with Ind. AS should be established.

    Acknowledgment
    This publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

Download Preview
Close
Problems and Perspectives in Management
Problems and Perspectives in Management