FUDMA Journal of Accounting and Finance Research [FUJAFR]
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Impact of Financial Risk on Profitability: Evidence from Nigerian Deposit Money Banks
Full text linkThe paper assesses the influence of financial risk on profitability of listed Nigerian Deposit money banks (DMBs). Profitability was proxied with return on assets (ROA), whereas financial risk as a predictor is measured with Liquidity Risk (LQR), Interest Rate Risk (IRR) and Operational Risk (OPR). The population of the study is all fourteen (14) Nigerian DMBs as at 31St December 2022 out of which twelve (12) DMBs were used for the analysis. Correlational research design was used, and data were generated from secondary sources, basically from the annual reports and accounts of twelve listed deposit money banks from 2013 to 2022. Descriptive statistics, correlation analysis as well as panel corrected standard error regression were utilized as tools of analysis for the study. The findings reveal that Liquidity risk and Operational risk has a positive and significant relationship with profitability measured by ROA of listed deposit money banks in Nigeria, while interest rate risk has a positive and insignificant relationship with profitability of listed deposit money banks in Nigeria. The positive and significant effect of liquidity risk on profitability means that listed DMBs are able to meet their obligations as at when due. Also, the result of operational risk on profitability indicates that increase in operational risk decreases profitability of listed DMBs. The positive effect of interest risk on profitability means that increase in interest rate increase profitability
An Assessment of Information Management Practices and the Containment of Financial Crimes in Nigeria
Full text linkThis paper assesses the effects of information management practices on the containment of financial crimes in Nigeria. A cross-sectional research design was used to examine the relationship between the variables of the study. A total of 454 structured questionnaires were administered to the compliance department’s staff of CBN, DMBS, EFCC, and NFIU. Data collected were subjected to various diagnostic tests such as normality, reliability, and validity using IBM-SPSS V.26 software. Single and multiple linear regression analyses were employed for interpretation of data. The study found a significant influence existed between information management practices (IM), while a non-significant influence existed between the dependent variable of the study. The result for multiple regression analysis indicates that IM are very significant variables influencing the containment of financial crimes in Nigeria. The study recommends that reporting entities (REs) and law enforcement agencies (LEAs) should ensure that their information management practices are robust and sufficient. This will aid the containment of financial crimes in Nigeria. The IV is proxied by information quality, information accessibility, information security, information governance, information usage, and user satisfaction, while the containment of FCs is proxied by money laundering and terrorism finance
Financial Performance Implications of Corporate Sustainable Expenditures in Economic Capital: The case of Listed Manufacturing Firms in Nigeria
Full text linkManufacturing firms’ financial performance is anchored on their respective capital expenditures. Extant studies have not conclusively agreed on the implications of respective capital expenditures on the firms’ financial performance. This study sought to contribute to the discourse by examining the implications of expenditures in economic capital on financial performance of listed manufacturing firms in Nigeria. The study is quantitative, combining descriptive and inferential approaches. A sample of 33 firms, with their annual reports from 2008 to 2022, was surveyed. Panel data from the firms’ annual reports were analysed using generalized least squares regression on STATA. Three hypotheses were tested. Results show that firms’ expenditures in economic capital do have important positive implications for financial performance of the manufacturing firms. Expenditures in research and development displayed the highest positive and significant effect, while expenditures in technological innovation and additions to fixed assets showed positive but insignificant effects on the firms’ financial performance. The a-priori expectation that all three components of sustainable expenditures on economic capitals have positive effects on the firms’ financial performance was met. The study concludes that sustainable expenditures in economic capitals are important for improving financial performance of firms. This suggests that listed manufacturing firms in Nigeria strengthen their policy commitment to consistently engage in research and developments, technological innovations and maintenance of a robust asset structure. The study recommends increased expenditures in technological innovation and fixed assets for the manufacturing firms, and suggests that further research seek to clarify the insignificant effects depicted by these expenditures
Board Diversity and Earnings Quality of Listed Deposit Money Banks in Nigeria
Full text linkInvestors’ confidence in the financial reporting process has been hampered because of unethical accounting practices and earnings management and this could be as a result of weak governance structures. The main objective of this study therefore was to examine the effect of board diversity on earnings quality of deposit money banks listed on the floor of the Nigerian Exchange Group from 2014-2023. The independent variable of the study was proxied by board age diversity, board experience diversity and board financial expertise, while the dependent variable was proxied by discretionary loan loss provision. The research design adopted for this study was ex post facto because secondary data were used. The sample size of this study was 10 deposit money banks purposively selected. Ordinary least square regression was used to analyze the data used and statistical software package employed was E-view version 10. The findings of the study revealed that board age diversity has a non-significant negative effect on the discretionary loan loss provisions; experience diversity and board financial expertise have significant negative effect on discretionary loan loss provisions of listed deposit money banks in Nigeria. Thus, it was concluded that board diversity has significant influence on earnings quality of listed deposit money banks in Nigeria. Therefore, it was recommended that the management of deposit money banks should prioritize recruiting board members with robust financial background and expertise to enhance both their earnings quality and financial risk management strategies
Intellectual Capital Efficiency and Cost of Capital among Listed Manufacturing Companies In Nigeria
Full text linkDespite the shift from industrial-based economy to knowledge-based economy, traditional accounting has continued to focus more on the physical assets in their financial statements to the exclusion of intangible asset. The main objective of this study therefore was to examine the effect of intellectual capital efficiency on cost of capital of manufacturing companies listed on the floor of the Nigerian Exchange Group from the period of 2014-2023. The research design adopted for the study was ex post facto, secondary data were used and the population of the study consisted of 62 listed manufacturing companies out of which a sample size of 27 was purposively selected. The data used in this study were analyzed using the Generalized Method of Moment (GMM) regression analysis. The findings of this study revealed that human capital efficiency (HCE), has a significant positive effect on the cost of equity; relational capital efficiency (RCE) has no significant effect on cost of equity; while structural capital efficiency (SCE) has no significant effect on cost of equity of listed manufacturing companies in Nigeria. Based on the above findings, it was concluded that intellectual capital efficiency can significantly impact on the cost of capital of listed manufacturing companies in Nigeria. It was therefore recommended among others that management of listed industrial goods companies should utilize advanced customer relationship management (CRM) systems to efficiently manage their interactions with customers and create competitive advantage
Mergers and Financial Performance of Access Bank Plc in Nigeria
Full text linkThis study examined the impact of mergers and acquisition on the financial performance of merged banks in Nigeria. Specifically, the study aimed to investigate the impact of the merger between Access bank Plc and Diamond Bank Plc on financial performance. The merger period was classified into (2016 to 2019) and (2020 to 2023). Secondary data was obtained from the annual reports of Access Bank plc for the period under review. The t-test statistic was used to determine if there is a significant difference in the financial performance of Access bank pre-merger and the post-merger. The findings revealed that there was a significant difference in the financial performance (ROE, ROA, CAR). Based on the findings, the study concludes that mergers and acquisition affect the overall performance of banks. The study therefore recommend that merger and acquisition is a strategy that banks should adopt to improve their financial performance
Corporate Governance and Accounting Conservatism of Quoted Non-Financial Firms in Nigeria
Full text linkThis study investigates the impact of some corporate governance attributes on accounting conservatism in Nigeria. The study covers the period from 2005 to 2020 of 75 non-financial firms listed on the floor of the Nigerian Exchange Group (NXG). The results of the generalized method of moments (GMM) reveal that while four of the variables board size (BODS), managerial ownership (MOWN), audit committee size (ACS) and number of foreign directors (NFODIR) are positively significant with accounting conservatism; two of the variables chief executive officer with military experience (CEOME) and board independence (BODI) are negatively significant with it but board gender diversity (BGDIV) is insignificant. Again, while the Big4 as well as the number of foreign directors (NFODIR) are positively significant; foreign income (FINCOME) as well as the industry (IDUM) and yearly (YDUM) dummy variables are positively insignificant. The study makes some recommendations such as management should maintain or increase the present level of board size, managerial ownership, audit committee size and the number of foreigners in the board since these variables allowed management to stick to prudence in financial reporting for the period under review
Corporate Governance and Voluntary Human Capital Disclosure of Quoted Deposit Money Banks in Nigeria
Full text linkThe study examines the factors influencing human capital disclosure in corporate reports of 14 Nigerian deposit money banks. The research used secondary data from annual reports from 2014 to 2023, and the logistics regression was used for data analysis. The results showed that managerial ownership positively affects human capital disclosure, leading to higher disclosure levels. This result aligns with previous studies showing a positive relationship between managerial ownership, institutional ownership, board financial expertise, board independence and human capital disclosure. The study concludes that managerial ownership is a viable corporate governance mechanism for improved voluntary disclosures. Signaling the market positively and encouraging executive directors to focus on long-term viability and product quality. The study suggests that board financial expertise positively impacts human capital disclosure (HCD), suggesting that understanding accounting principles and financial statements can improve board oversight and shareholder interests. It recommends companies to improve human capital disclosures in corporate reports, adopt robust methodologies, and encourage voluntary disclosure of value-added human resource activity
Effectiveness of Fiscal and Economic Policy in Monitoring Inflation in Nigeria
Full text linkThis study investigates the effectiveness of monetary and fiscal policies in controlling inflation in Nigeria from 1993 to 2023. Using co-integration and error correction methods on yearly time series data, the study reveals several key findings. The unit root test indicates that only inflation (INF) is stationary at levels, while money supply (MS), taxation (TAX), and government expenditures (GEX) are stationary at first difference. The results show that an increase in the money supply and government expenditures lead to a rise in the inflation rate, whereas higher taxation reduces it. Based on these findings, the study concludes that MS, TAX, and GEX significantly impact on inflation in Nigeria. The study recommends that policymakers should better manage the money supply to reduce the inflation rate by decreasing the amount of money in the economy. Increasing the tax rates on individuals and companies, especially during periods of high inflation, can lower the amount of spendable money among citizens, thereby reducing inflation. Lastly, the government should control its expenditures to decrease the total amount of money in circulation, effectively reducing the country\u27s inflation rate
Ownership Structure and Environmental Disclosure among Nigerian Listed Firms
Full text linkThe study investigated the effect of ownership settings on Nigerian listed firms’ environmental disclosure for the period 2012 – 2022. The predicting variables includes managerial ownership, foreign ownership, government ownership, and institutional ownership. A correlational approach was adopted to explore the variables’ natural relationships. Published annual reports of 95 Nigerian listed firms were used as a source of secondary data. The extent of environmental disclosure by the sampled firms was measured using the Global Reporting Index (GRI). Panel regression analysis revealed that foreign, government and institutional ownership have a significantly positive effect on environmental disclosure among Nigerian listed firms. Although, the findings did not yield conclusive evidence on a link between managerial ownership and environmental disclosure among the companies. The results of this study are crucial for regulatory authorities, stakeholders and policymakers, as it pinpoint the most effective strategies for firms to address environmental disclosure challenges and highlight key factors that drive and enhance environmental transparency. As a result, the study recommended that the industry regulators should work together with government in revitalizing the nation’s economy which in turn encourage more investment from foreign investors. Additionally, management should prioritize and encourage government and institutional holding in the Nigerian listed firms as there monitoring characteristics can enhance firm\u27s environmental disclosure practices