FUDMA Journal of Accounting and Finance Research [FUJAFR]
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A Comparative Analysis of Agency Monitoring Cost and Financial Performance of Financial and Non-Financial Companies in Nigeria
Full text linkCorporate governance is vital for transparency, accountability, and efficiency in organizational management. A key aspect of corporate governance is agency monitoring, which entails costs incurred to oversee managerial actions and align them with shareholders\u27 interests. However, the impact of agency monitoring expenses on financial performance varies across sectors. Financial institutions, subject to strict regulatory oversight, require intensive monitoring, whereas non-financial firms may experience less scrutiny. Understanding these differences is crucial for policymakers, investors, and corporate managers aiming to enhance financial performance while maintaining strong governance. This study employs a correlational research design to examine the relationship between agency monitoring cost and financial performance in listed financial and non-financial firms in Nigeria. Based on market capitalization, the analysis covers 20 firms—10 financial and 10 non-financial—selected from 157 companies listed on the Nigerian Exchange Group (NGX) between 2011 and 2020. Data were sourced from the firms\u27 annual reports and analyzed using panel regression estimates. Findings indicate that agency monitoring costs significantly enhance financial performance in financial firms, while their impact on non-financial firms is minimal. These results align with agency theory, which stresses the necessity of stringent oversight to mitigate managerial opportunism. The study underscores the sectorial differences in agency monitoring effectiveness and recommends that financial institutions prioritize monitoring expenses to improve governance and performance by strategically investing in efficient oversight mechanisms that align managerial actions with shareholder interests. These insights contribute to corporate governance literature and provide practical guidance for firms seeking to balance monitoring costs with financial efficiency
The Role of Financial Ratios in Bankruptcy Prediction: An Empirical Study Using Contemporary Financial Data
Full text linkCorporate bankruptcy poses considerable risks to various stakeholders. This study investigated contemporary issues in predicting corporate bankruptcy in the non-financial public companies in the United States, using five key financial ratios: Cash Flow to Total Liabilities (OANCFLT), Net Income to Total Sales (NIREVT), Total Liabilities to Total Assets (LTAT), Total Current Assets to Total Current Liabilities (ACTLCT), and Total Assets to Total Sales (ATREVT). Utilizing a multivariate logistic regression model and monthly data from 2017 to 2021, this research examined the predictive power of these ratios and their effectiveness in identifying early signs of corporate failure. The findings underscore the importance of certain financial ratios, particularly LTAT with 80% predictive power in the year before bankruptcy and OANCFLT at 65% and statistically significant with t-values of -2.85, offering valuable insights for stakeholders aiming to mitigate financial risks
The Effect of Financial Technology on MSMEs Performance: The Mediating Role of Financial Inclusion
No full textFinancial technology (fintech) has made financial services more accessible to small and medium enterprises (SMEs) by offering digital payment methods and alternative financing platforms. Because of this advancement, financial inclusion has improved, making it easier for SMEs to get loans and handle transactions effectively. The purpose of the study is to empirically investigate the effect of fintech on SME performance in Jigawa State and whether financial inclusion can mediate the relationship. A descriptive research design approach was used to sample 352 SMEs in Jigawa State, Nigeria, using a convenient sampling technique. A structural equation modelling technique using Smart PLS v.4.1 software was used to test inferential statistics, and SPSS v.23 software was used to test descriptive statistics. The specific indirect effects statistics show that among the dimensions of fintech, Perceived Usefulness (PUS) and Perceived Ease of Use (PEU) were found to mediate between financial inclusion and SME performance, whereas Perceived Trust (PTT) and Responsiveness (RPN) have no mediating effect. The result of the path coefficient indicates that PUS, PEU, and PTT have a positive and significant influence on financial inclusion, while RPN does not. Among the fintech dimensions, PUS & RPN have a positive and significant effect on SME performance, while PEU & PTT don’t. The study also found that financial inclusion significantly predicts SME performance. The government should support fintech companies to develop new business solution apps/software since their perceived usefulness is recognised by SMEs
Regulatory changes and their Impact on Tax compliance: An overview of Finance Act 2023
Full text linkThe aim of this study is to evaluate and review the regulatory changes and their impact on tax compliance, it is an anthology of the existing literature on finance Act and tax compliance with a view to identifying the gaps to which future literature may be directed within the Nigerian context. The paper discusses the concept of finance Act and its surrounding issues on tax compliance as appraised by different authors. The data used for the study were mainly secondary data from different sources. The researchers critically review related literatures from various secondary sources with a particular emphasis on Finance Act 2023, as well as other Nigerian tax legislations. The secondary sources were complemented by the personal observation of Nigerian tax system in Nigeria by the researchers. The study revealed mixed findings on the extent to which finance Act and other financial regulations impact on the economy. The study also concludes that, the factors determining financial regulations are not fixed, and vary from one jurisdiction to another. The study therefore recommends that, from the theories that relates to financial regulations, there shall be a unified theory that amalgamates the existing theories; and that which will be amenable to the ever-changing reporting environment
Bibliometric Analysis of Accounting Literature on Artificial Intelligence (AI) Adoption in Organizational Functions
Full text linkArtificial intelligence (AI) is a powerful technology with a high potentiality of transformative drive from traditional analog to digitalized organizational seamless decision processes efficiently and effectively. AI is an emerging area in organizational decision-making with limited number of studies across the globe. However, AI is now gaining considerable attention from the researcher, both at the local and international level. This study aims at providing a systematic review and biometric analysis on AI adoption in organizational functions using Google Scholar databases as the source of data. The study employs the steps of Prepare Reporting Items for Systematic Literature Review and Meta-Analysis Techniques PRISMA (2020) and bibliometric analysis techniques using VOS-View as a tool for analysis of publications performance over time with a view to determining the most influential articles, publication productivity, and direction of studies on AI Adoption in organizational functions for a period of ten years from 2015 to 2024. The analysis reveals that articles published in 2016 by Sage Journal recorded the highest citation of 2707, followed by MDPI Journal with total citations of 1922 in 2021, while Elsevier presents the lowest citation of 87 citations over the period of 10 years in the database used. These articles were written on more than 20 areas of application of AI in organizational functions
Impact of Shadow Economy on Tax Revenue in Sub-Saharan Africa
Full text linkThis study tends to focus on how shadow economy and trade openness influence tax revenue in the Sub-Saharan Africa (SSA). The study used four SSA countries to test this relationship from 1991 to 2017. The study employs pool OLS with robust standard error to address the potential threat of heteroscedasticity. The result from this estimation indicate that shadow economy diminished the amount of tax revenue generated by these countries. Thus, the study recommends that appropriate measures should be put in place to curtail the size of the shadow economy because of its detrimental effects on tax revenue
Liquidity and Profitability of Listed Deposit Money Banks in Nigeria
Full text linkGiven the present global economic challenges, deposit money bank plays a vital role in economic development. This study examined the relationship between liquidity on profitability of listed deposit money banks in Nigeria, with a target population of 13 quoted deposit money banks in Nigeria as at 31st December 2022. judgmental sample has been used to arrive at 9 sample size. The study covered a period of 10 years from 2013 to 2022.the study applied Stata V14.2 and the estimation techniques are OLS ordinary least square and diagnostic test (multi-collinearity and heteroscedasticity test), the data obtained were analysed using descriptive statistics, multiple regression and correlation co-efficient. The study adopts return on asset, return on equity as dependent variable for profitability and current asset, cash ratio and free cash flow as the independent variables for liquidity with leverage and company size as the control variables. The study concludes that, there is significant relationship between liquidity on profitability of listed deposit money banks in Nigeria, the study recommends management of DMBs to employs appropriate policy and measure that will make DMBs to be self-liquidate and solely not depend on maximization of profit but also management of effective liquidity level
Natural Capital Accounting and Profitability of Listed Manufacturing Firms in Nigeria
Full text linkThis study examines the impact of natural capital accounting on profitability of listed manufacturing firms in Nigeria and it adopts correlational research design. The population of the study consists of sixty-four manufacturing firms listed on the Nigerian Exchange Group (NGX) for thirteen years between 2010- 2022. The study used the purposive sampling method, to obtain a sample of forty-nine manufacturing firms that meet the criteria. Return on Asset (ROA) is considered as proxy of profitability while natural capital accounting index (scores) were generated using 7 items in line with International Initiative on Integrated Reporting Council (IIRC). Data for the study was extracted from the annual reports and accounts of the sampled firms for the period under study, and analyzed using multiple regressions. The result revealed that natural capital accounting has significant and positive effect on return on asset (ROA). Based on these findings, this study therefore, concludes that natural capital accounting influence profitability of listed manufacturing firms in Nigeria. This study recommends among others that, listed Nigerian manufacturing firms should emphasize more on reporting their natural capital accounting as it is capable of improving their profitability. This can be achieved through proper and accurate reporting of their environmental information, because it affects profitability significantly. Also, in line with global best practices, regulatory agencies in Nigeria should issue reporting standards that would make reporting of all sustainable capital items and particularly environment/natural capital accounting mandatory
Impact of Non-Financial Services by Listed DMBs on the Development of SMEs in Nigeria
Full text linkThis study examined the Impact of Non-Financial Services by listed DMBs on the development of Small and Medium Enterprises (SMEs) in Nigeria. The study adopted survey research design by administration of questionnaire to a sample size of 150 drawn from the population of Micro, Small and Medium Enterprises (MSMEs) registered with CAC. Descriptive statistics, t-test and simple linear regression analysis were employed to analyze the data with the aid of SPSS. The findings of the study revealed a strong and statistically significant relationship between non-financial services and SMEs’ growth and development. Based on this, the study recommends that Deposit Money Bank (DMBs) should focus on tailoring their non-financial services to meet specific needs of different categories of MSMEs as classified by SMEDAN. There is also the need for increased awareness among SMEs regarding availability and benefits of non-financial services provided by DMBs
Role of Treasury Single Account in the Optimization of Public Sector Funds in Nigeria
Full text linkThis study delves into the Treasury Single Account (TSA) and its role in the optimization of public sector funds in Nigeria. In the quest to obtain accurate data for this research project, primary data was gathered through a well-structured questionnaire designed to elicit responses from participants, thus fulfilling the prerequisites of this study. The population of the study is 80 staff of the Central Bank of Nigeria (CBN) and the Office of Accountant General of the Federation (OAGF). The survey was conducted through the administration of a structured questionnaire. Descriptive statistics and regression analysis were used in the study. The findings of the study revealed that the Treasury Single Account plays a significant role in optimizing public sector funds. The study concluded that TSA is significant in the optimization of public sector funds in Nigeria. For the purpose of efficiently managing and ensuring transparency and accountability in the utilization of public funds, the government of Nigeria ought to strengthen and consolidate on the gains of implementing the TSA system