Accounting Conservatism and Performance of Nigerian Consumer Goods Firms’: An Examination of the Role of Accruals

Ugwunta, David Okelue; Ugwuanyi, Boniface Uche

doi:10.5430/ijfr.v10n1p1

Cited by 12 publications

(13 citation statements)

References 18 publications

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“…Conservative accounting leads to reducing the financing cost, increasing investment returns, and enhancing the corporate cash value (Li 2015). Moreover, some studies suggest that accounting conservatism positively impacts the quality of financial reports (Kordlouie et al, 2014;Penman & Zhang, 2002;Ugwunta & Ugwuany, 2019).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…They found that earnings management practices had a significant negative influence on stock liquidity and it increases the trading cost. Ugwunta and Ugwuany (2019) examine the relationship between accounting conservatism and performance in Nigerian firms. Data of 12 Nigerian consumer goods firms were used during 2005-2016.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…However, there are studies which criticize conservatism for the potential distortion of information, its negative impacts on resource allocation and on corporate performance. While the relationship between performance and accounting conservatism has been the theme of intensive research in developed and developing economies, for example Ugwunta and Ugwuany (2019) in Nigeria, Sana'a (2016) in Jordan, Chiraz and Anis (2013) in France, Chiraz and Anis (2013) in Iran, and Chan et al (2006) in the UK, no such studies have been conducted in Egypt. According to the contingency theory, the relationship between conservative accounting and corporate performance differs according to the diverse institutional environment.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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The Impact of Accounting Conservatism on Corporate Performance Indicators in Egypt

El-Habashy¹

2019

IJBM

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This study aims to investigate the impact of conservative accounting on corporate performance indicators of Egyptian firms. A sample of balanced data for the 40 most active non-financial companies was collected in the period 2009-2014 to test hypotheses. Panel regression models were used for data analysis. Givoly & Hayn (2000) indicator is used as a benchmark for measuring accounting conservatism. The corporate performance indicators used in this study are return-on-assets (ROA) and return on equity (ROE) representing accounting performance measures, as well as Tobin’s Q which measures market performance. The results of the research show that accounting conservatism has a significant positive impact on corporate performance indicators. This reflects the positive effect of corporate performance on shareholders that leads to a strong corporate financial position. To the best of our knowledge, no study has been conducted in Egypt as an emerging economy.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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The Impact of Accounting Conservatism on Corporate Performance Indicators in Egypt

El-Habashy¹

2019

IJBM

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“…The hypotheses were tested using the accounting conservatism has a positive but non-significant effect on firm performance while assuming the fixed effects. Opposed to the assumed negative relation, findings from the study have suggested that accounting conservatism has a positive but non-significant effect on firm performance [14]. Therefore, it implies that firms in the Nigerian consumer goods sector do not practice accounting conservatism and hence produces low financial reporting quality.…”

Section: Empirical Reviewmentioning

confidence: 74%

Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria

Cyril¹,

Oghenekohwo²,

Chukwuemeka³

2019

SJBM

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Fair value of a firm's asset is one of the determinants of its net-worth and marketability. It is a rational and unbiased estimate of the potential market price of a good (commodity), stock, service or asset of a firm. The main objective of the study is to determine the effect of fair value accounting on assets of consumer goods manufacturing companies in Nigeria. The study adopted ex-post facto research design and data were sourced from three selected companies through purposive sampling technique. Analysis was carried out on ten years pooled data on total assets (the dependent variable), fair value (proxy by share value), market value (proxy by Net Assets), and depreciation value. The findings show that fair value has significant effect on assets of consumer goods firms in Nigeria. The study recommends that management of consumer goods companies should consolidate on improvement of fair value of firms through their assets management and appropriate policies, adopt the best practices that would raise the share prices and maintain higher book values of the firms, and use depreciation as a source of replacement of old assets thereby stabilizing the Net worth of the firms.

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“…In accounting, earnings quality defines as true and fair in reporting earnings with reasonableness in explaining firm performance (Mohd Radzi, Islam, & Ibrahim, 2011;Subramanyam, 2014). Ugwunta and Ugwuanyi (2018) that firms with better earnings quality seize more conservative financial reporting. According to one of the methods for estimating earnings quality is by examining the level of accounting conservatism since it is one of the proxies for earnings quality.…”

Section: Accounting Conservatismmentioning

confidence: 99%

Accounting Conservatism and Financial Performance: Accountability of Shariah Compliant Companies in Malaysia

Fariz

Mohammed

Zulkepli

et al. 2020

Humanities and Social Sciences Letters

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The accountability of Shariah-compliant companies is essential to ummah to ensure the quality of earnings and enhance performance. This study examined the association of accounting conservatism, which is a proxy for accounting quality and the financial performance of Shariah-compliant companies in Malaysia. Financial statements with high quality assist in better decision making, thus preventing fraud activities and misappropriation of assets. The data consisted of 144 firm-year observations of Shariahcompliant companies from 2012 to 2017. The results revealed that accounting conservatism is a feature of financial statements of Shariah-compliant companies in Malaysia and accounting conservatism had a positive association with financial performance. The findings gave insights on the accounting quality and performance of the Islamic capital market in Malaysia. This study contributes to the knowledge of financial reporting quality by explaining the ethical behavior of companies using stewardship theory. Contribution/Originality:This study is one of very few studies which have investigated financial performance in relation to conservatism on listed Shariah-compliant companies by using two models which is Basu (1997) and Khan and Watts (2009) model.

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Accounting Conservatism and Performance of Nigerian Consumer Goods Firms’: An Examination of the Role of Accruals

Cited by 12 publications

References 18 publications

The Impact of Accounting Conservatism on Corporate Performance Indicators in Egypt

The Impact of Accounting Conservatism on Corporate Performance Indicators in Egypt

Effect of Fair Value Accounting on Assets of Consumer Goods Firms in Nigeria

Accounting Conservatism and Financial Performance: Accountability of Shariah Compliant Companies in Malaysia

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