Global Journal of Accounting

Directors’ Loans, Directors’ Shareholdings and Earnings Management Practices: Evidence from Banks Listed on the Nigerian Exchange Group

Muinat Wuraola Salawu, Moruff Adeyemi Salawu — Fri, 01 Nov 2024 00:00:00 +0000

The incidence of bank failures has led to different investigations in the banking sector. A major recurring issue has been that the books do not reflect the true and fair position as a result of earnings management (EM) practices which has misled stakeholders as to the position of the organisations. Anchored on the agency theory, the study investigated the role that directors’ loans and shareholdings play in the EM practices of banks listed on the Nigerian Exchange Group. Employing the ex-post facto research design, the study made use of the discretionary loan loss provision as a proxy to measure the EM practices in the eleven listed banks used as its sample. The Ordinary least square regression was used to determine the relationship that exists among the directors’ shareholdings, directors’ loans and EM practices in the banks while controlling for the effect of firm size and financial performance. The study found that directors’ shareholdings has a negative and significant relationship with EM practices while directors’ loans has a negative and significant relationship with EM practices. The study concluded that due to the significance of these relationships of the independent variables to EM practices, there should be stricter guidelines with regards to directors’ loans by the regulatory authorities.

Corporate Characteristics and Performance Disclosure of Listed Deposit Money Banks in Nigeria

Ayodele Ojo-Agbodu, Oluwafunmilayo Olubukola Ajibola , Amos Olafusi Tomomewo — Fri, 01 Nov 2024 00:00:00 +0000

Using the balanced scorecard (BSC) model, the study investigated the impact of corporate characteristics (board size, board independence, board age, firm size, and age) on performance disclosure of Nigerian deposit money institutions. The population of the study comprised of Deposit money banks listed on the Nigerian Exchange (NE). Using purposive sampling method, the study gathered secondary data from published financial statements of the selected Ten (10) banks out of the fifteen (15) quoted banks listed on the Nigerian Exchange (NE) over a ten-year period (2012–2021). Using an adapted disclosure checklist, the annual reports of the ten (10) listed Deposit money banks were content-analysed for performance disclosure for the period 2012–2021. Ex-post facto research methodology was used while the data was analyzed using descriptive statistics, regression, and STATA. The study found that corporate characteristics (board independence, board size, board gender diversity, firm size, and age) have an impact on effective performance disclosure, but it also points out that the DMBs in Nigeria are more influenced by board size and board gender diversity when it comes to performance disclosure. The research therefore recommends that the board size of banks should be increased from an average of thirteen to fifteen or more to enhance it performance disclosure. The number of female board members should be increased from the research has shown that increases in this regard will enhance performance disclosure.

Exploring the Link Between Professional Scepticism and Audit Quality: An Income Smoothing Approach

Wasiu Ajani MUSA, Olawale Monsuru RAIMI, Kazeem Adebayo USMAN — Fri, 01 Nov 2024 13:00:58 +0000

The vital role played by the assurance providers in moderating the agency relationship is as important as the total amount committed to the entity. However, the weakness of the adopted monitoring mechanism gives room to fraud and kills audit quality. To overcome this challenge, this academic study explored the influence of professional scepticism on the audit quality of companies listed in the financial services sector of the Nigerian Capital Market. This study examined the dimensions of experience, traits and motivation of assurance services, as it impacted fraud detection and audit quality. A random sampling of firms was conducted to select twenty-five companies in the financial sectors of the Nigerian Exchange Group (NXG). Thereafter, the audited annual report and the auditor’s website were navigated for the dataset. The static panel regression estimators were utilized for inferential statistics after considering post-estimation diagnostic tests. Findings reveal that auditor experience and trait significantly increase fraud detection, and consequently, audit quality will rise in the financial services sector. Based on these findings, it was concluded that both auditor’s experience and traits are the drivers of fraud detection and quality assurance provision in the listed financial services firms of the NXG. It was recommended that audit firms should give appropriate consideration to factors that impact the quality of professional services rendered. Experience and expertise, specialization and tenure, complexities and regulatory framework should be monitored to ensure the protection of stakeholders and the working of monitoring mechanisms

Taxation and the Performance of Small and Medium Enterprises in Nigeria

Aderemi Mathew Oloyede, Olatunde Julius Otusanya, Ala-Peters David — Fri, 01 Nov 2024 00:00:00 +0000

This study critically investigated the relationship between taxation and the performance of small and medium enterprises in Lagos State, Nigeria. Specifically, the study investigated the relationship of tax policy and effectiveness of SMEs in Nigeria; investigated the impact of tax administration on profitability of SMEs in Nigeria; examined the effect of multiple taxation on productivity of SMEs in Nigeria; determined the effect of tax incentives on efficiency of SMEs in Nigeria. Survey research design was employed and the sample of three hundred and ninety-six (396) SMEs operators determined using Taro Yamane (1067) was drawn from fourty-two thousand and sixty-seven (42,067). Data were gathered through self-administered questionnaire and the hypotheses were tested using Correlation and Analysis of Variance with the Aids of SPSS (Statistical Package for Social Sciences). The findings revealed that tax policy has significant relationship with the effectiveness of SMEs. But tax administration was revealed to have had no significant impact on profitability of SMEs. It was furthered revealed that multiple tax has significant effect on the productivity of SMEs, and that tax incentives have significant effect on the efficiency of SMEs. Thus the study concluded that tax policy and multiple tax as well as tax incentives were capable of improving performance of Small and Medium Scale Enterprises in Nigeria. But tax administration seemed to have poor effect on the SMEs performance. It was therefore recommended that Governments should design targeted tax policies that will actively encourage investments in SMEs in Nigeria, and to create a tax friendly environment through wide publicity / sensitization exercise

Tax Revenue Mobilization and Infrastructural Development in Nigeria

Eloghosa Peter Aisien, Olatunde Julius Otusanya, David Ala-Peters — Fri, 01 Nov 2024 00:00:00 +0000

This study sought to examine the relationship between Tax Revenue Mobilization and Infrastructural Development in Nigeria. Specifically, the study investigated the impact of Petroleum Profit, Company Income Tax, Value Added Tax and Capital gain tax revenue on Infrastructural Development in Nigeria. The study adopted ex-post factor research design, and data was gathered from the Federal Inland Revenue Service Statistical Bulletin (2002-2022) and CBN Statistical bulletin (2022). In order to evaluate the analysis, four hypotheses were formulated and tested using Ordinary Least Squares (OLS) regression technique. The findings revealed that the Petroleum Profit Tax Revenue has no significant effect on Infrastructural Development in Nigeria. It was also revealed that Company Income Tax Revenue has significant effect on Infrastructural Development in Nigeria. The findings as well revealed that Value Added Tax Revenue has significant effect on Infrastructural Development in Nigeria; and also, showed that Capital Gain Tax Revenue has on Infrastructural Development in Nigeria. The study thus concluded that corporate income taxes revenue and value added tax revenue have significant effect on infrastructural development while petroleum profit tax and capital gain tax were otherwise. These implied that tax revenue measures such as (companies’ income tax and value added tax significantly affect infrastructure development in Nigeria. It was recommended that government should put in place adequate measure to ensure that revenue generated from petroleum profits tax and capital gains tax are effectively utilized to develop and grow the economy through proper infrastructural development.