IMPACT OF FINANCIAL ACCOUNTING SYSTEM ON CORPORATE PERFORMANCE OF MANUFACTURING FIRMS IN NIGERIA

Authors

  • Sagin O. Super Department of Accounting, Faculty of Management Sciences, Federal University Dutse, Jigawa State, Nigeria. Author
  • Fitahu Shehu Isa Department of Accounting, Faculty of Management Sciences, Federal University Dutse, Jigawa State, Nigeria. Author
  • Callista Ukamaka Uchegbu Department of Accountancy, Faculty of Management Sciences, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria. Author
  • Zaharaddeen Ibrahim Rabiiu Department of Accounting, Faculty of Management Sciences, Federal University Dutse, Jigawa State, Nigeria. Author

Keywords:

Financial Accounting System, Corporate Performance, Financial Reporting Quality, Return on Asset,, Return on Equity

Abstract

This study examined the impact of financial accounting system on corporate performance of manufacturing firms in Nigeria. The reason for this study was because financial report is expected to show the economic and financial situation of the company, in order to inform managers and shareholders and is of crucial importance in decision making, when the interests of both shareholders and creditors must be taken into account. The specifics objectives of the study were to ascertain the effect of financial reporting quality on return on assets, effect of financial reporting quality on return on equity and effect of financial reporting quality on net profit margin all in manufacturing companies in Nigeria. Secondary data was used in this study and Ordinary Least Square (OLS) multiple regression was used to analysed the data with the aid of SPSS version 23 output statistical software. The study employed an ex post factor research design because the data for the study was extracted from annual report and account of the manufacturing companies in Nigerian. A purposive sampling technique was employed to select 10 financial firms listed on the Nigerian Exchange Group as at 31st December, 2023. The study covered a time frame of five (5) years, starting from 2019 – 2023. The study found out that positive relationship between financial reporting quality and returns on assets, a negative relationship between financial reporting quality and returns on equity and a positive relationship between financial reporting quality and net profit margin of selected manufacturing companies. We therefore, recommended timeliness of audited corporate annual financial reports is considered to be a crucial and an essential factor affecting the usefulness of information made available to various users, the use of joint auditors is also encouraged, as the volume of transactions in most Nigerian firms are constantly increasing, the possibility of efficiency and effectiveness in audit might be likely eroded and appointing outside directors to the board is an effective board leadership style to reduce the agency problem and increase reporting quality.

 

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Published

2025-05-14

Issue

Vol. 2 No. 1 (2025): February

Section

Articles

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