FUDMA Journal of Accounting and Finance Research [FUJAFR]
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Corporate environmental disclosure and market value. Do board independence matter?
Full text linkPurpose: This paper aims to examine the relationship between three measures of corporate environmental disclosure and market value using Nigerian non-financial listed companies. The paper also explores the effect of the moderating role of board independence.
Methodology: We use DICTION software to obtain the measurements of environmental disclosure volume, general disclosure tone, and specific disclosure tone, as well as regression analysis using the GMM model to take care of endogeneity issues.
Results and conclusion: The empirical studies revealed that general environmental disclosure and specific environmental disclosure have a positive and statistically significant impact on the Tobin’s Q. We document that board independence positively moderates the relationship between general and specific environmental disclosure on Tobin’s Q. We recommend that firms should focus on environmental responsibility reporting as a driver for better performance and value enhancement and that it will help to achieve SDG 12 as enshrined in the United Nations SDGs 2030 agenda. The paper considers only the environmental dimension of sustainability with the use of only non-financial listed Nigerian companies for twelve (12) years (2011-2022).
Implication of findings: Management, investors, professionals, policymakers and authorities should consider the environmental disclosure requirements for proper informed decisions. The study tests the progress in achieving the sustainable development goals (SDG 12) as well as the role of the moderating variable of board independence in Nigerian listed non-financial firms
Corporate Governance Attributes and the Likelihood of Fraud on Financial Statements of Listed Deposit Money Banks in Nigeria
Full text linkFrequent occurrences of banks winding up and merging in Nigeria have cast doubt on the adequacy of existing corporate governance mechanisms, which necessitates an investigation into how governance attributes influence the integrity of financial reporting. Therefore, this study examined the effect of corporate governance attributes on the financial statement fraud likelihood of listed deposit money banks in Nigeria for the period 2014-2023. An ex-post facto research design was adopted for the study. This study utilized census sampling techniques to take all 15 deposit money banks listed on the Nigerian Exchange Group (NGX). The data used in this study were secondary, derived from the annual reports and accounts of deposit money banks listed in Nigeria. The study used logistic regression to analyze data. The logistic regression results revealed that independent directors, audit committee independence, and financial expertise have a significant effect on the financial statement fraud likelihood of listed deposit money banks in Nigeria. The board size and gender diversity have no significant effect on financial statement fraud likelihood. The study concluded that independent directors, audit committee independence, and financial expertise reduce the likelihood of financial statement fraud, while board size and gender diversity have no influence on the likelihood of financial statement fraud. The study recommended that deposit money banks in Nigeria should focus on appointing independent directors and audit committee members with strong financial expertise. Although board size and gender diversity may not directly influence fraud risk, active involvement of all directors in fraud prevention is essential
Nigeria\u27s Public Accountability and Supreme Audit Institutions: A Case Study of Lagos State Civil Service
Full text linkThe study investigates the role of auditors from the Office of Internal Audit in enhancing financial performance and accountability within Lagos State Civil Service. Financial accountability is crucial for transparency, integrity, and responsible management of funds. However, inadequate audit resources, resistance to scrutiny, inefficiencies in audit processes, and non-regulatory compliance can affect it. The study aims to evaluate the impact of financial audits conducted by the Office of Internal Audit on the financial accountability of Ministries, Departments, and Agencies in Lagos State. The research employs an explanatory research design to assess cause-effect relationships using numerical data and statistical analysis. Primary data was gathered through structured questionnaires targeting auditors, financial officers, and administrators within Ministries, Departments, and Agencies (MDAs). The collected data was analyzed using regression analysis, correlation tests, and descriptive statistics to establish relationships between variables. At 0.05 significant level, the study\u27s key findings of the study revealed that financial, performance, and regulatory audits significantly improve financial accountability among MDAs in Lagos State, fostering transparency, responsible resource management, and ethical governance. The study however concludes that regular financial audits are essential for accountability, policy decisions, and strengthening internal controls. Performance audits guide resource allocation, budget planning, and enhance financial oversight. Regulatory and compliance audits ensure ethical governance, legal compliance, and safeguard public resources against mismanagement and corruption. The study recommends that regular implementation of financial audits to maintain accountability and guide policy decisions. Strengthening internal controls and audit committees is crucial for sustained financial discipline
Effect of Free Cash Flow and Inventory Turnover on Performance of Listed Manufacturing Firms in Nigeria: The Moderating Role of Leverage
Full text linkThe impact of free cash flow efficiency, inventory turnover, and financial leverage on firm performance remains fragmented and inconclusive in the existing literature, with limited context-specific insights tailored to the Nigerian manufacturing sector. This study examined the effect of free cash flow efficiency, inventory turnover, and financial leverage on the performance of listed manufacturing firms in Nigeria using panel data of 49 companies covering the period 2012 to 2023. Firm performance was proxied by Tobin’s Q, while regression analysis was conducted using the robust random-effects model. This study adopts an ex post facto research design. The findings revealed that financial leverage had a positive and statistically significant effect on firm performance proxied by Tobin’s Q, while free cash flow efficiency and inventory turnover have an insignificant effect on Tobin’s Q. However, the interaction between Free Cash Flow Efficiency and Financial Leverage was positive and significant, suggesting that Financial Leverage moderates the relationship and enhances the effect of Free Cash Flow Efficiency on firm performance. The study concluded that financial leverage, when prudently managed, plays a strategic role in enhancing Tobin\u27s Q, particularly when paired with efficient internal cash flow utilization. Based on these findings, it is recommended that manufacturing firms in Nigeria adopt prudent leverage strategies that complement efficient free cash flow management, as the combined effect significantly enhances market valuation and overall firm performance
Impact of Capitalization on Financial Performance of Jaiz Bank plc
No full textThis paper investigated the impact of capitalisation on the financial performance of Jaiz Bank Plc, the first full-fledged Islamic bank in Nigeria. Using quantitative research methodology, the study examined the relationship between risk management and financial performance, such as Return on Assets (ROA). The data were obtained from the published financial statements of the Jaiz Bank Plc in Nigeria from 2013 to 2023. The study employed the multiple regression technique. The SPSS software package version 26 was used to carry out the analysis. Descriptive statistics and regression analysis are employed to analyse the data. The findings showed that capitalisation (CAP) significantly impacts ROA. It is, therefore, recommended that Jaiz Bank Plc should improve capitalisation strategies to enhance ROA. This can be achieved by efficiently allocating its capital to high-yield Sharia-compliant investments and enhancing capitalisation through equity financing or issuing Sukuk
Effects of audit committee attributes and corporate board activity on earnings quality of quoted consumer goods companies in Nigeria
Full text linkPurpose: The study examined the effect of audit committee attributes and corporate board activity on earnings quality of listed consumer goods companies. Also, the effect of pooled audit committee attributes using principal component analysis and board activity was examined on earnings quality.
Methodology: The study population was twenty-four listed consumer goods companies, while a sample of seventeen firms was purposively selected. Secondary data obtained from annual reports of the sample firms was analysed using both random and fixed effects.
Results and Conclusion: Results showed that the audit committee’s financial literacy and expertise in audit and accounting have a significant negative effect on earning quality, while other audit committee attributes showed insignificant effects. Also, board size and leverage have negative significant effects on earnings quality. Furthermore, the results of the pooled audit committee’s attributes show an insignificant positive effect on earnings quality, while board size and board meetings have a significant negative effect on earnings quality. The study concludes that audit committee members with financial literacy, board size, and frequency of audit committee meetings reduce management tendencies to manage earnings.
Implication: The practical implication of the study’s findings is that members of the audit committee who are financially literate and the size of the audit committee members have the potential to dissuade management from opportunistic behaviour
The moderating effect of corporate governance on the relationship between entrepreneurial orientations and business performance of women owned enterprises in North-western States of Nigeria
Full text linkPurpose: This study aimed to examine the moderating effect of corporate governance on the relationship between entrepreneurial orientation and business performance of women-owned enterprises in the northwestern states of Nigeria. However, the nature and existence of this potential relationship were found to be mixed, which prompted this study to re-examine the relationship.
Methodology: The data were collected from a field survey of the women-owned enterprises in the northwestern region of Nigeria. A total of 222 questionnaires were returned, but only 210 were usable for data analysis from the target respondents, which consist of women owners/managers of businesses in the selected SMEs. This study employed the quantitative survey research approach and Partial Least Squares Structural Equation Modelling (PLS-SEM) algorithm and bootstrap techniques to test the hypotheses.
Results and conclusion: Results obtained support the hypothesis on the direct influence of the entrepreneurial orientation and its proxies, such as innovativeness, competitive aggressiveness, autonomy and corporate governance, on business performance. Similar results regarding the moderating effects of corporate governance on the relationship between entrepreneurial orientation and business performance were also found. Interestingly, the findings indicated that corporate governance positively moderates the relationship between entrepreneurial orientation and business performance.
Implication of findings: Finally, this study has succeeded in validating the aforementioned conceptualisation as well as advancing significant theoretical and practical contributions to the researchers, entrepreneurs and regulatory authorities for further understanding of the influence of entrepreneurial orientation and business performance
Islamic Banking System in Nigeria: Challenges and Gains from Its Operation
Full text linkIn contrast to traditional banking systems, this study assesses the challenges facing the Islamic banking system and the gains accrued to its operation from the point of view of the Nigerian economy. The staff and stakeholders of the selected Islamic banks in Nigeria were the focus of structured questionnaires and interviews conducted as part of a mixed-methods research approach. Secondary data came from industry reports, academic journals, and government regulations. A sample of 450 staff from the banks was selected using a stratified sampling method. The study used descriptive and inferential statistical techniques to analyze the data. Findings discovered inadequate public knowledge, a lack of Sharia-compliant investment opportunities, and regulatory shortcomings are some of the main issues noted. Despite this, Islamic banks play a vital role in Nigeria\u27s efforts to reduce poverty, promote ethical investing, and promote financial inclusion. The results also show that Islamic banks are superior at managing credit risk. These results provide policymakers and Islamic financial institutions with doable suggestions for raising public awareness, creating thorough regulatory frameworks, and extending financial inclusion initiatives
Cashflow Management and Financial Performance of Industrial Goods Sector in Nigeria
Full text linkThe primary objective of this research is to investigate the impact of cash flow management on the financial performance of the industrial goods sector in Nigeria. Specifically, the study focuses on assessing the influence of cash flows from operating activities, cash flows from investing activity, and cash flows from financing activities on return on equity of selected industrial good firms in Nigeria. Ex post facto research is a study that investigates possible cause-and-effect relationships by analyzing data from events that have already occurred, without manipulating any variables. The panel least squares regression techniques were employed to examine the implicit relationship between the variables. The study found a significant negative relationship between cash flow from investing activities and financial performance. Additionally, cash flow from financing activities does not show a statistically significant relationship with financial performance in this sector. These findings highlight important considerations regarding the role of cash flow management in driving financial outcomes. In conclusion, the research underscores the importance of a balanced approach to cash flow management across all activities, operating, investing, and financing to achieve sustainable financial performance in the industrial goods sector. Firms should prioritize investments that align with their strategic objectives while maintaining efficient operations to optimize financial outcomes. It is recommended that firms focus on selecting investment projects with higher potential returns and avoid inefficient or excessive investments that do not align with their strategic goals
Audit Committee Attributes and Audit Report Lag of Listed Non-financial Firms in Nigeria
Full text linkFinancial reporting timeliness is one of the qualitative features of a relevant financial report. However, there have been delays by some companies in submitting the report audited above the 90-day regulatory deadline provided. It is in line with this that this study seeks to examine the effect of audit committee attributes and audit report lag of listed non-financial firms in Nigeria over a period of 10 years across the sector. The dependent variable for the study is audit report lag, while the independent variable is audit committee attributes proxied by audit committee meeting and audit committee composition. The study employed a truncated Poisson regression to analyze the data. It was found that the audit committee meeting has a negative and significant impact on the timeliness of the financial report of listed non-financial firms in Nigeria. This implies that an increase in audit committee meetings significantly reduces audit delay of non-financial firms in Nigeria and vice versa