Malete Journal of Accounting and Finance
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FIRM SPECIFIC CHARACTERISTICS AND DIVIDEND PAYOUT RATIO: AN INSIGHT OF QUOTED COMPANIES ON THE NIGERIAN STOCK EXCHANGE
Full text linkThis study investigates the relationship between firm specific characteristics and dividend payout ratio of quoted firms in Nigeria. The population of the study consists of one hundred and sixty-nine (169) firms listed on the Nigerian Stock Exchange as at 31st December 2018 and from which a sample of one hundred and two (102) firms were selected for a period of nine (9) years spanning from 2010 to 2018 making a total of nine hundred and eighteen (918) completed observations. Data collated from secondary source were analysed on the basis of POLS, FE and RE estimates. For the purpose of consistency and efficiency, the study further carried out post estimation test which include restricted F-test and Hausman test. The estimation result of the RE indicated that inventory intensity and firm share price intensity jointly had a positive and significant relationship with dividend payout ratio. In addition, capital intensity, labour intensity and R&D intensity jointly had a negative and significantly relationship with dividend pay-out ratio. Hence, this study recommends that managers of Nigerian quoted firms should lower the amount of cash spent on capital intensity, labour intensity and R&D intensity so that the value of profitability will increase; and the same time, dividend pay-out ratio will equally increase. In addition, inventory intensity and share price intensity of the firms should be maintained so as to continue paying good dividend to the shareholders that will lead the firm to achieve the shareholders’ value maximisation objective
INSTITUTIONAL DETERMINANTS OF NON-PERFORMING LOANS OF DEPOSIT MONEY BANKS IN SUB-SAHARAN AFRICA
Full text linkIn the banking industry, the risk of Non-Performing Loans (NPLs) is quite substantial and its minimisation is essential for the growth of the industry and the economic development of Sub-Saharan Africa countries. This study focused on institutional factors as key determinants of NPLs of Deposit Money Banks in Sub-Saharan Africa. The study adopted an ex-post facto research design using a panel data covering the period 2006-2020. The data was collated from the World Bank Governance Indicators, World Bank Development Indicators and Heritage Foundation Database for the period under study. This study applied System GMM technique with an elaborated econometric method, based on a panel set from 23 Sub-Sahara African countries. Four institutional factors; namely control of corruption with coefficient value of (0.44%), financial freedom with coefficient value of (0.13%), rule of law with coefficient value of (0.341%) and regulatory quality with coefficient value of (-0.618%) were all significant on NPLs at (5%,) respectively. In conclusion, for banks in Sub-Saharan Africa to reduce the issues of NPLs and enhancing credit quality, both internal and external factors should be put into consideration for sustainable financial system stability. The study therefore, recommended among others, that government of Sub-Saharan Africa countries need to adopt effective legal restructuring with respect to bad loans, improve the functioning of their regulatory bodies, reduce corruption and government interference in banking businesses so as to decline the issues of NPL
MANAGEMENT CONTROL SYSTEM AND PERFORMANCE OF SMALL AND MEDIUM MANUFACTURING ENTERPRISES IN LAGOS, NIGERIA
Full text linkManagement control system (MCS) constitutes one of the critical functions of management in organizations. However, little or no attention has been given to design and use of this very important function of management. Many mechanisms or techniques acknowledged to be in use to carry out management control function are limited to accounting-based control techniques which have been criticized to have behavioral dysfunctional consequences such as lack of direction, efforts aversion and other self-interested behaviors. In response to the limitations of accounting control system, the need to broaden the scope of MCS and humanize its role becomes imperative. In view of the foregoing, the study investigated how Small and Medium Manufacturing Enterprises engage in the practice of MCS and its effect on performance. The study employs quantitative method to obtain survey data from randomly selected 262 of small and Medium Manufacturing Enterprises in Lagos State respectively. The obtained quantitative data was subjected Partial Least Squares (PLS-SEM) analysis. The findings of the study revealed that variation in performance of Small and Medium Manufacturing Enterprises (SMMEs) was attributed to four management control mechanisms: compensation (β=0.225,P<0.05) and Planning (β=0.332,P<0.05) significantly impact on performance while Policies and procedures(β=0.206,P<0.05) and socio-cultural control(β=0.436,P<0.05)also have significant effect on performance. The study concluded that managers of Small and Medium Manufacturing Enterprises employ some accounting and non-accounting control mechanisms to achieve goal congruence among their subordinates and to a greater extent, the practices impact positively on performance. Therefore, the study recommended that SMMEs should integrate both accounting and non-accounting control mechanisms into the design of their control system architecture
IMPACT OF SOCIO-CULTURAL FACTORS ON DEMAND FOR INSURANCE POLICY AND PRODUCT IN NIGERIA
Full text linkThe insurance sub-sector of financial services industry aims at smoothening financial distortions in the economy. However, the sector is weak due to inappropriate response to economic challenges. The potential of the insurance industry in emerging countries like Nigeria is being hampered by socio-cultural attributes of the customers which include many dimensions such as language, education, ethnic background and religion. These factors make customers to be skeptical in deciding on insurance policies which consequently lead to poor penetration and poor performance of the insurance sector. As a result, the present study examines the impact of socio-cultural factors on the taking up of insurance policy in Nigeria. The study adopts survey research design and the sample size is 384 respondents and the data obtained was analyzed using descriptive and inferential statistics. The result of analysis reveals that Christian religious belief, language, trust, and level of awareness of customers statistically and significantly influence the extent of procurement of insurance policy by customers in Nigeria. However, the Islamic religious belief and ethnicity of the customers do not have statistically significant relationship with demand for insurance policy. The study concludes that Christianity, trust and level of awareness of customers influence their demand for insurance policy in Nigeria. Consequently, insurance companies should strengthen the level of trust between their agents and the customers and should widen their level of publicity in order to improve demand for insurance policy in Nigeria
AUDIT FEE, AUDITOR’S EXPERIENCE, AND EARNINGS MANAGEMENT: EVIDENCE FROM LISTED MANUFACTURING COMPANIES IN NIGERIA
Full text linkManipulation of financial statement has a great consequence on the economy as it could lead to the collapse of many manufacturing companies. This study examined the effects of audit fee and auditor’s experience on earnings management of listed manufacturing companies in Nigeria. In order to achieve this, Ex-post facto research design was utilized with the population consisting of seventy-six (76) listed manufacturing companies. Sixty-four (64) companies were chosen as the sample size using Krejcie and Morgan (1970) sample size determination table. Descriptive and inferential statistics were employed in the analysis of the data collected from the annual reports and accounts of the chosen companies for the period of five years (2013-2017). The study found out that audit fee has a significant negative effect on the level of earnings management of listed manufacturing companies in Nigeria at 5% significant level (t-value of -0.3409 with p-value of 0.001). However, auditor’s experience has no significant relationship with earnings management (t-value of -0.0021 with p-value 0.063). The study concluded that audit fee has a significant negative impact on earnings management of listed manufacturing companies in Nigeria, while auditor’s experience has no significant effect. Therefore, the study recommended that management should not have a fixed remuneration for external auditors. Rather, it should be reviewed periodically and that separate audit firms should be employed to provide non-audit services to a client’s firm
TAX ADMINISTRATION STRATEGIES AND PERFORMANCE OF STATE INTERNAL REVENUE SERVICES IN SOUTH-WEST NIGERIA
Full text linkThe dwindling pattern of revenue received by states from the central government of Nigeria, especially in the period of falling oil price constitutes a serious challenge to governments in fulfilling their contractual obligations. Consequently, governments across states charge their internal revenue agencies to innovatively pursue revenue mobilisation through various strategies within the chain of tax administration practice. The extents to which all the deployed strategies have effectively yielded more revenue deserve systematic inquiry. Thus, the study investigated the relationship between tax administration strategies and performance of state’s internal revenue services in South West Nigeria. To achieve this objective, quantitative method was employed to obtain survey data from randomly selected 382 revenue officers out of the total population of 8,734 staff of state internal revenue services in South-West Nigeria. The obtained quantitative data was subjected to both descriptive analysis and Partial Least Squares (PLS-SEM) regression analysis. The findings of the study revealed that revenue collection strategy (β=0.104, t-value=18.114, P-value<0.05); Staff compensation strategy (β=0.153, t-value=2.291, P-value <0.05) and Tax advocacy strategy (β=0.106, t-value=5.349, P-value<0.05) have significant positive impact on the revenue performance of state internal revenue service in South West Nigeria. Based on result of analysis, the study concludes that all strategies deployed within the chain of tax administration practice are effective in enhancing revenue capacity of the State Government’s in the South West of Nigeria. Therefore, the study recommends that governments should intensify efforts through adequate funding for the deployment of strategies in the areas of revenue collection, advocacy and staff incentives to enhance revenue generating capacity of states in South West Nigeria
INTERNAL AUDIT QUALITY AND PERFORMANCE OF PUBLIC TERTIARY INSTITUTIONS IN OSUN STATE, NIGERIA
Full text linkDespite the presence of internal audit mechanism in most public tertiary institutions, evidence has shown that most of them have experienced audit failure in recent years with consequential effect on the effectiveness and efficiency in quality of service delivery, financial control and performance. In view of this, the study examined the impact of internal audit quality on performance of public tertiary institutions in Osun State, Nigeria. Primary data was obtained through the administration of structured questionnaire to 72 respondents out of total population of 151 comprising staff of internal audit and bursary departments in three state-owned tertiary institutions in Osun State. Data obtained was analyzed using Correlation Analysis and OLS - Multiple Regression technique. The results show that there is a significant relationship between internal audit quality and performance of Osun state-owned tertiary institutions as confirmed with F (3, 68) = 52.96; P< 0.05). The study concluded that internal audit quality is a veritable tool for promoting performance in terms of efficiency, effectiveness, economy, and quality of service delivery of state-owned tertiary institutions. This study therefore, recommended among others that internal auditor competence and independence should be given more attention and mechanism through which these qualities can be employed and sustained for better internal audit service delivery to enhance performance of public tertiary institutions
RELATIONSHIP BETWEEN BOARD CHARACTERISTICS AND PROFITABILITY AMONG DEPOSIT MONEY BANKS IN NIGERIA
Full text linkThis study examines the relationship between board characteristics and profitability of Deposit Money Banks in Nigeria. Data used for the research are secondary and are generated from the Corporate Governance Section of Nigeria Deposit Insurance Corporation (NDIC) Reports. Profitability which is the Dependent Variable is proxied by Return on Asset (ROA); while Board Size, Board Independence, Gender Diversity and Board Meeting are Independent Variables. This study used panel data analysis to analyze the data collected for this work with findings that Board Size and Gender Diversity have negative relationship with Return on Asset and that Board Independence and Board Meetings have positive relationship with Return on Asset. The goodness of fit of the model affirmed the relationship between Board Characteristics and profitability to be significant. Therefore, this study recommends that Deposit Money Banks should further strengthen the independence of their boards and take their board meetings as a matter of importance since they have positive relationship with their profitability
CAPITAL STRUCTURE AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
Full text linkThe role of capital structure decision is critical to the performance of any bank. For any bank to efficiently perform its function of financial intermediation, it must be financially structured. Against this backdrop, the study investigated the impact of capital structure on the financial performance of listed Deposit Money Banks (DMBs) in Nigeria spanning from 2006 to 2019. The study adopted panel data obtained from the annual reports and financial statements of the sampled listed DMBs on the Nigerian Stock Exchange. Descriptive and inferential statistics were used to examine the association between the dependent variable of financial performance proxied by the return on assets and independent variables represented by equity capital and leverage ratios while asset tangibility and liquidity were used as control variables. The results of both system dynamic panel Generalized Methods of Moment (GMM) estimator and Toda and Yamamoto (1995) granger non-causality model showed that equity capital significantly and positively affects return on assets (ROA) while leverage ratio significantly but negatively impacts on return on assets (ROA). There is also, a reverse causality relationship running from return on assets (ROA) to capital structure. Based on this, it is suggested that managements of DMBs should pursue financing policies that reduce reliance on debt finance and increases the use of retained profit as internal equity sources, in order to achieve the optimal level of capital structure for better and sustainable performance
PANEL STUDY OF CREDIT MANAGEMENT DIMENSIONS AND LOAN PERFORMANCE OF NIGERIAN BANKS
Full text linkThe study examines the impact of credit management dimensions on loan performance of Nigerian banks. The study adopted a quantitative approach that employed the ex-post facto research design that focused on the panel data study. The population consisted of the entire 22 listed banks in Nigeria according to the report made by CBN (2019). The sample size is made up of 10 listed banks that are listed before the year 2010 and were not delisted before the year 2019. This was used to provide an adequate time frame necessary to establish the causes and effect of the occurrence. The methods of analysis were correlation and regression. The study establishes that credit risk has a positive relationship with the loan performance of Nigerian banks while interest spread and interest rate charged have a negative relationship with the loan performance of Nigerian banks. This implies that the interest rate charged and increase in interest disparity employed by Nigerian banks has led to poor loan performance. The study, therefore, recommends that Nigerian banks should apply efficient and effective credit risk management that will ensure that loans are matched with ability to repay, loan defaults are projected accordingly, and relevant measures taken to minimise the same. Nigerian banks should also enhance periodic credit risk monitoring of their loan portfolio to increase the loan performanc