Responsibility Accounting and Profitability of Listed Companies in Nigeria

Abstract

Structuring activities into responsibility centers and optimization of resource is a priority in meeting investors' performance and profitability expectations in both small and large organizations. Studies have shown that to meet these expectations, adequate performance evaluation and reward system are managers' challenges. This study investigated the effect of responsibility accounting on profitability of listed companies in Nigeria. Ex-post facto research design was adopted. The population was 173 quoted companies on the Nigerian Stock Exchange as at 31st December 2016. Ten companies were selected using stratified and purposive sampling technique. Data were extracted from published financial statements of sampled companies; validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive and inferential (Panel data regression) statistics were used to analyze the data. The study revealed that profitability measured by NPBT, of listed companies in Nigeria is significantly influenced by responsibility accounting (RA), F-Stat=114.56, AdjR 2 =.0.6964, p=0.000. There is no significant difference in the result of NPBT with and without the control variable of firm size. The result with control variables revealed F-Stat=87.63; AdjR 2 =0.7242; P=0.000. The study also revealed that RA had a positive significant relationship with EPS with control variables of firm size, F-Stat=6.56, AdjR 2 =0.1442; P=0.000. However, without control variables, no significant effect of responsibility accounting on EPS was observed as shown in the following result: F-Stat=0.45, AdjR 2 =-0.0112, p=0.64. Furthermore, the study revealed that profitability measured by ROA exhibited an insignificant relationship with RA given the following results, AdjR 2 =0.0089; P=0.000. RA with control variables of firm size, insignificantly affected ROA while Firm Size exerted significant positive effect on ROA (as the size of the firm changes by a unit, ROA increased by 23.9% as seen in model 3b) given the following result: AdjR 2 =0.0399; P=0.782. This study concluded that responsibility accounting had an influence on profitability of listed companies in Nigeria. The study recommended that since profitability is the whole essence of responsibility accounting, managers should ensure delegation of task with responsibilities clearly spelt out, regular appraisal process, achievable project budgeting, instituting cross functional teams and efficient reward systems put in place towards achieving the corporate objective that would influence better profitability.

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

“…This includes business services, other deposits and mobilization of savings which requires reasonable and effective management actions that support the business sustainability within the environment in which the business is located. In recent years, the banking industry in Nigeria faced a lot of economic challenges that borders on management's performance (Adegbie, Urewa & Owolabi, 2020). Likewise, economic growth has not been inclusive, and Nigeria's economy faced key challenges of lower productivity and the weak expansion of sectors with high employment elasticity as a result of challenges in the banking industry (Wilson, 2023).…”