Responsibility Accounting and Corporate Investment Decisions among Listed Manufacturing Firms in Nigeria

Abstract

Over the years, corporate and institutional investors had suffered huge financial losses because of poor or wrong investment decisions taken based on manipulated financial information. Studies have shown globally that the practice of financial report misrepresentation commonly leads to loss of credibility, integrity and confidence in accounting information and the earnings become questionable. This situation now calls for additional sources of information that would enhance the quality of corporate investment decision. This study investigated the impact of responsibility accounting adoption on corporate investment decisions in selected listed manufacturing companies in Nigeria. The study adopted survey research designs with a population of 54 listed manufacturing companies in Nigeria. Purposive sampling technique was used to select 510 respondents from a sample frame of 34 companies. A structured questionnaire was used to collect data validated using Cronbach Alpha with Coefficient ranging from 0.772 to 0.907 with 97.2% response rate. The data were analyzed and validated using descriptive and inferential statistics. The study found that responsibility accounting had significant influence on corporate investment decisions (Adj. R 2 = 0.425, R 2 =0.429,F(5474) = 120.747; p<0.001). The study concluded that responsibility accounting influences corporate investment decisions for different stakeholders in selected listed manufacturing company in Nigeria. The study recommended that investors and decision makers alike should consider and monitor the organizational structure, manager's responsibility power, budgetary control system, performance report and reward system in addition to the audited financial statement when embarking on corporate investment decisions.

Responsibility Accounting and Corporate Sustainability Growth: Evidence from Listed Deposit Money Banks in Nigeria

“…We therefore accepted the alternate hypothesis that interest expense is significantly related to the sustainability growth of the banks in Nigeria. The finding seems agreeable with the findings of Adegbie, Urewa, and Owolabi (2020), Yisa, Ishola, and Folajimi (2020), who reported that the accountability account determines firm performance.…”

“…Using t-test and Pearson's correlation, the results of the study showed that responsibility accounting has significant impact on performance. Yisa, Ishola, and Folajimi (2020) carried out a survey research designs with a population of 54 listed manufacturing firms in Nigeria. Using a targeted sampling technique, 510 respondents were selected from a sample frame of 34 firms; the study found that responsibility accounting had significant impact on companies' investment decision.…”

“…N84 billion, Skye Bank (2018) N126 billion and Intercontinental Bank (2012) N400 billion. Yisa, Ishola and Folajimi (2020) also noted that the federal government through the intervention of the Central Bank of Nigeria saved depositors' funds through the conversion of Skye Bank Plc to Polaris Bank Plc on September 24, 2018. The death of Mainstream Bank Plc, Oceanic Bank Plc, Intercontinental Banks Plc, Bank PHB Plc, Enterprise Bank and Savannah Bank Plc is still fresh in investors' minds.…”

“…For instance, the recent study of Van, Phat, Ngoc, Phuong and Van (2022) on responsibility accounting in Vietnam used primary data for assessing managers' responsibilities. Also Yisa, Ishola, and Folajimi (2020) used primary data for assessing managers' responsibilities in Nigeria while Adegbie and Olaoye (2018) used accounting based measure of return on assets for assessment of mangers' responsibilities. Market measures such as share price, net assets per share and Tobin Q measure are ignored and neglected.…”