Malete Journal of Accounting and Finance
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LIQUIDITY AND PERFORMANCE: EVIDENCE FROM THE DEPOSIT MONEY BANKS IN NIGERIA
Get PDFThe decline in financial performance and inability of some deposit money banks in Nigeria to meet the minimum threshold in liquidity requirements stimulated the interest to examine the possible effect of liquidity on performance of these banks. Hence, the study examined the performance of the banks from financial and operational dimensions. Secondary data was used for this study and the data was sourced from the audited financial reports of the sixteen quoted DMBs in Nigeria as at December 2018. The analytical method employed to analyze the data was the System Generalized Method of Movement (GMM) estimator. The empirical results showed that among the proxies for liquidity (liquidity ratio, cash reserve ratio, loan to deposit ratio), only cash reserve ratio was significant and consistent on both dimensions of performance. The results equally showed that size has a significant positive relationship on financial performance and negative relationship on operational performance. Thus, based on these findings, the study concluded that cash reserve ratio and size are major drivers of banks’ performance. Consequently, this study recommended that the regulatory authority (CBN) can employ cash reserve ratio as a tool for controlling the flow of currency in circulation since its effect is consistent on both dimensions of performance. In addition, banks need to expand their operation by reaching out to more customers since size has a significant relationship on profitability
BOARD COMPOSITION AND FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
Get PDFThe performance of banks has been identified as critical to the development of any economy. The boards of these banks also occupy a critical role in their performance as they are responsible for the long term success of the banks. It has become a big question what board composition is appropriate for effective performance of corporate organizations of which banks are not exceptional. This study therefore examined the effect of board composition on the financial performance of listed deposit money banks in Nigeria. Five (5) banks were randomly sampled and studied over a six year period (2012-2017). Data collected from various annual reports and accounts were analyzed using Ordinary Least Square Regression analysis. Results show that board size has negative significant effect on the financial performance of listed deposit money banks in Nigeria while non-executive directors have positive significant effect on the financial performance of listed deposit money banks in Nigeria. This study recommends among others, a board size composition of ten and a maximum of fifteen (15) for deposit money banks depending on the scale and complexity of the bank without prejudice for skills, competence, independence and availability of meetings. This study also recommends in line with corporate governance codes that emphasis be placed on non-executive directors although with great care and considerations given to skills, competence, experience, independence and availability for meetings
DYNAMIC INTERACTIONS AMONG EXCHANGE RATE, PERFORMANCE OF MANUFACTURING SECTOR AND INFLATION IN NIGERIA: AN ARDL APPROACH
Get PDFThe manufacturing sector is the hub for the transformation of raw materials to finished or semi-finished goods. By engaging in both international and domestic markets, macro-prices are likely going to interplay with the behavior of the sector. This study determines the direction of causality among exchange rate, inflation and manufacturing sector (MS) performance. It further analyzes the effect of exchange rate on inflation and MS performance in Nigeria. Secondary and annual time series data that covered 1981 to 2018 are sourced from World Development Indicator (WDI) published by World Bank Organization. This study employed the Augmented Dickey Fuller (ADF), Philip-Perron (PP), Johanson cointegration, VEC multivariate Granger causality/Exogeneity and Autoregressive Distributed Lags (ARDL) bounds tests. The findings revealed that a long run relationship exists among MS performance, exchange rate and inflation, but only inflation has a statistically significant positive effect on MS performance in the long run. Also, a unidirectional causality runs from exchange rate to MS performance and from inflation to MS performance, while bidirectional causality runs between exchange rate and inflation. In the short run, exchange rate has a negative effect on MS performance in the current year, but positive effect in the previous year. The effect of inflation on MS performance is positive in both the short and long run. This study recommends that both exchange rate and inflation should be regulated by the monetary authority through appropriate monetary policies like low rate of interest and rejection of further currency devaluation measures to promote the performance of the MS without jeopardizing the welfare of the citizenry in Nigeria, since both high exchange and inflation rates are characterized by adverse welfare effects
INFLUENCE OF BOARD FINANCIAL EXPERTISE ON TAX COMPLIANCE OF NON- FINANCIAL LISTED FIRMS IN NIGERIA
Get PDFGenerating enough tax revenue is still a universal phenomenon due to unabated tax scandals in all jurisdictions. This study sought to provide empirical evidence on the influence of independent board financial expertise(IBFE) on tax compliance of non-financial listed firms in Nigeria using Effective Tax Rate (ETR), Cash Effective Tax Rate (CETR) and Permanent Tax Difference (PERMDIFF) as tax proxies. This study employed explanatory sequential design of mixed method to collect and analyse quantitative and qualitative data and merged the data-sets for interpretation of the results. The study explored data from 68 firms out of 116 non-financial listed firms in Nigeria from 2004 to 2018 while qualitative data was obtained through semi structured interviews on 17 corporate governance agents. A Generalised Least Squares Regression and Discourse analysis were used to analyse the quantitative and qualitative data, respectively. The combined GLS results (Wald Chi square) show that IBFE has a positive statistical significant (ꞵ=0.0000; P<0.05) influence on tax compliance of non-financial listed firms in Nigeria. The qualitative result aligns with the quantitative result. The study concludes that independent financial expertise of the board is of paramount importance to achieving tax compliance in Nigeria. The study recommends that the Financial Reporting Council of Nigeria (FRCN) should promote and implement a policy for the engagement of at least 20% experienced, technically knowledgeable and high integrity independent financial experts on the corporate board for a better monitoring and control of managemen
RELEVANCE OF FORENSIC ACCOUNTING PROFESSIONAL CERTIFICATIONS ON FRAUD REDUCTION IN NIGERIAN DEPOSIT MONEY BANKS
Get PDFThis study examines the relevance of forensic accounting professional certifications on fraud reduction in Nigerian deposit money banks. The study is based on ex post facto and survey research designs. Data was collected through primary and secondary sources. Analysis of secondary data was done using Ordinary Least Square (OLS) regression technique which further necessitated correction of the problem of autocorrelation via Generalized Least Square regression. Bootstrapping estimation procedure was also carried out to confirm the regression results from the tested hypothesis. Analysis of primary data was undertaken, using One-way ANOVA. The results from the findings based on the bootstrapping estimation method clearly suggest that increasing the engagement of forensic accountants’ significantly reduces the incidence of fraud in deposit money banks in Nigeria. The results further reveal significance difference in practitioners’ perceptions on the relevance of forensic accounting certification criteria to fraud reduction in Nigeria which successfully meets the body of knowledge, ethical code of conduct and protection of public interest conditions but fails to adequately fulfil the control of entry requirement. Consequently, the study recommends, among other policy options, more awareness campaign by professional bodies to educate regulatory authorities on constant utilisation of forensic accounting services
BANKING SERVICE INNOVATIONS AND CUSTOMER SATISFACTION IN ILORIN METROPOLIS OF NIGERIA
Get PDFThe increasing stiff competition in the banking industry has placed customer satisfaction at the centre of banks’ product and service decisions. The study examines the impact of banking service innovations on customer satisfaction in Ilorin metropolis. The study employed survey research design and the population consist of bank customers in Ilorin metropolis from which four hundred and twenty five (425) customers were drawn as sample. Descriptive statistics and Partial Least Square Structural Equation Model (PLS-SEM) were employed in the analysis of data collected through structured questionnaire. The findings revealed that, cardless ATM service (t-value = 5.650, p-value = 0.000) and phygital banking (t-value = 6.175 and p-value = 0.000) have significant impact on customers satisfaction at 5% level of significance whereas envelop deposit service had no significant effect. The study concluded that banking service innovations such as cardless ATM and phygital banking are the service innovations that influence customer satisfaction in Ilorin metropolis. The study therefore recommended that managements of DMBs should provide more ATMs with cardless operation options at bank premises or other commercial points in the metropolis. Also, DMBs’ management should design more user friendly, personalised and less costly digital bank applications which can enable customers to efficiently access virtually all bank services even without visiting any branch
IMPACT OF IPSAS ADOPTION ON FINANCIAL MANAGEMENT, ACCOUNTABILITY AND TRANSPARENCY OF SELECTED GOVERNMENT PARASTATALS IN ZARIA
Get PDFThe change in accounting regulations on disclosure is as a result of the weaknesses and low requirements of earlier regulations. IPSAS reporting has more disclosures than former Nigeria cash basis especially for public sector. This study therefore, examines impact of recognition, measurement and disclosure under IPSAS on transparency, accountability and financial management of selected government parastatals in Zaria. Using Census sampling technique, all sixty (60) accounting personnel that were represented in the population were tested. Data was collected with the aid of questionnaire from the selected Parastatal (Ahmadu Bello University, Zaria and the Federal College of Education under the Federal Ministry of Education; the Nigerian Institute for Leather Science and Technology under the Federal Ministry of Science and Technology; the National Institute for Transport Technology; and, the Nigerian College for Aviation Technology under the Federal Ministry of Transport) The study was anchored on institutional and agency theory. Cross sectional research design was adopted, while institutional and agency theory was used to underpin the study. The result shows that disclosure and recognition have significant and positive impact on accountability; financial management and transparency respectively at 1% level of significance. In line with the findings, therefore, we recommend that public sector institutions should adopt IPSAS for better management, accountability and transparency in financial reporting. As IPSAS prescribes a manner in which general purpose financial statements should be prepare
NIGERIAN LOCAL GOVERNMENT ADMINISTRATION: A COMPARATIVE ANALYSIS OF THE THIRD AND FOURTH REPUBLICS
Get PDFLocal governments are not independent unlike nation-states, which derives their existence and powers from the law enacted by a higher government. While they are constitutionally provided for as a third tier and independent level of government, like the other two; the Federal and State Governments in Nigeria. Local government in Nigeria is rooted on historical antecedents of reforms. The 1976 Local Government Reform in Nigeria and the subsequent one that followed were geared towards making local governments, the bedrock for socio-economic and political development. Somehow, the 1999 constitution of the fourth republic seems to have overridden the gains and aspirations of this tier of government, this assertion can be verified by looking at how the 1999 constitution undermined the autonomy and aspiration as well as the efficacy of grassroots governance, unlike the 1989 constitution of the third republic that gives more power to local governments. The major findings were that each reform measure was necessitated by the short-comings inherent in the preceding system; some of the reforms were far reaching and had positive impacts, while others were cosmetic in nature and mainly for political expediency. The paper recommends among other things the strengthening of local governments in the country, through granting of considerable autonomy, especially financial, political as well as administrative. Finally, the paper concludes that since the local government today remains the key institution in local governance, there is a need for another constitutional arrangement or reform in order to ensure autonomy of local governments politically and financially
BUDGET COMMUNICATION AND JOB SATISFACTION AMONG LISTED MANUFACTURING FIRMS IN NIGERIA
Get PDFIn a business organisation, it is important that all information relevant to the job is effectively communicated to managers and other employees. If the relevant information is not exchanged properly within the organisation, it can impact negatively on the employee-job satisfaction. The study examines how job satisfaction is influenced by budget communication among manufacturing firms listed on Nigeria Stock Exchange. The population of the study consisted of 40 listed manufacturing companies in Lagos state. However, from the target population, a sample size of 185 respondents was determine through Taro Yamane sample size determination formulae used for the study. The data for the study were gathered through structured questionnaires, and analyzed using regression analysis. Empirical findings revealed that budget communication has significant and direct influence on job satisfaction among the sampled firms. It is concluded that the use of budget as a medium for communicating job related information to line managers and other key personnel makes employees happy about their jobs. It is therefore recommended that business organizations should design their budgets in such a way that would allow information about business plans and strategies to be effectively communicated to the operational managers and other important staff members
MODERATING EFFECT OF RISK GOVERNANCE COMMITTEE BETWEEN BOARD INDEPENDENCE AND FINANCIAL PERFORMANCE AMONG NIGERIAN LISTED FINANCIAL INSTITUTIONS
Get PDFThe risk governance committee establishes risk strategy, reviews risk reports and provides enterprise risk management advice to board members. Though research on board independence is has established the influence on firms’ financial performance, there are concerns as to its extent. This study examines the moderating role of risk governance committee on the relationship between board independence and financial performance of listed financial institutions in Nigeria for the period of 2016-2020. The population of the study comprised of 57 financial institutions listed on the Nigerian Stock Exchange as at December 2020 from which a sample of 47 firms was used. Multiple regression technique was employed for data analysis. The results show that board independence and risk governance committee have insignificant relationship with financial performance but significantly moderates the relationship between board independence and financial performance of listed financial institutions in Nigeria. The study recommends that financial institutions in Nigeria should strengthen risk governance committee and encourage more number of knowledgeable outside/independent directors. This is because the presence of a strong risk governance committee could improve the efficiency of the firm’s financial performanc