DETERMINANTS OF ACCOUNTING CONSERVATISM OF LISTED INFORMATION AND COMMUNICATION TECHNOLOGY COMPANIES IN NIGERIA

Okechukwu Okonkwo (PhD), Daniel Emmanuel Kayode (PhD), Ibrahim Hassan Jimba (PhD)

Abstract


This study examines the effect of sustainability reporting and board structure on accounting conservatism of listed information and communication technology companies in Nigeria. Ex post facto research design was used. The population of the study comprised of 9 ICT companies as at 31st December 2021 listed in Nigerian Exchange Group (NGX) of which eight (8) firms were taken as the sample size using purposive sampling technique. The technique for data analysis was multiple regression, while the period of the study was from 2012 to 2021. Finding revealed that sustainability reporting, board of director’s gender diversity, board independence and board financial expertise have significant positive effect on accounting conservatism, while board size has an insignificant positive effect on accounting conservatism. The study recommends that companies should ensure that there is disclosure of the basic indicators of Global Reporting Initiative (GRI) and also ensures consistency on sustainability reporting, the disclosure of the basic indicators of GRI will assist investors in conducting company’s holistic review of opportunities and risks.


Keywords


Conservatism, Sustainability Reporting, Agency Theory, Board Structure

Full Text:

PDF

References


Abbas, R., Mehdi, A. & Fatemeh, G. (2017). The effect of mandatory corporate social responsibility on accounting conservatism in Tehran stock exchange corporation. International journal of academic research in accounting, finance and management sciences, 7(3), 120–125.

Ahmed, A. & Duellman, S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. Journal of accounting and economics, 43(2), 411- 437.

Akbar, J., Jalal, S., Morteza, N. & Milad, J. (2013). Accounting Conservatism and Corporate

Governance’s Mechanisms: Evidence from Tehran Stock Exchange. International Journal of economics, business and finance, 1 (10), 301- 319.

Allam, H. & Talal, A. (2012). The Impact of Audit Committee Characteristics on Accounting Conservatism: The Case of Jordanian Industrial Companies. SSRN electronic journal, 1- 15.

Amran, N. & Manaf, K. (2014). Board independence and accounting conservatism in Malaysian companies. International conference on accounting studies, 403 – 408.

Anis, J. (2013). An Empirical Examination of the Relationship between Board of Director Composition, Ownership Structure and Accounting Conservatism. International journal of economics, finance and management sciences, 1( 6), 273-284.

Basu, S. (1997). The conservatism principle and the asymmetric timeliness of earnings. Journal of accounting and economics, 1(1), 3-37.

Beaudoin, C. (2008). Earnings management: the role of the agency problem and corporate social responsibility. A Thesis Submitted to the Faculty of Drexel University.

Boshi, G. (2021) Does board gender diversity influence the adoption of conservative accounting policies? Master of Philosophy thesis, Queensland University of Technology.

Christian, O., Anichebe, S. & Emeka, N. (2022). Board structure and accounting

conservatism in listed non-financial firms in Nigeria. European journal of accounting, auditing and finance research, (10)3, 42-58.

Dina, E. (2020). Audit Committee Characteristics and Accounting Conservatism: Does the Power of People Matter?, 1-42.

Duru, K., & Tsitinidis, A. (2013). Managerial incentives and earnings management: an empirical examination of the income smoothing in the nordic banking industry. M.Sc. dissertation in accounting, auditing & analysis, Uppsala university.

Elkalla, T. (2017). An empirical investigation of earnings management in the MENA region. A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy universityof the West of England, 1-393.

Elshandidy, T. & Hassanein, A. (2014). Do IFRS and board of directors’ independence affect accounting conservatism? Applied Financial Economics, 24(16),1091-1102.

El-Habashy, H. (2019). The Effect of Corporate Governance Attributes on Accounting Conservatism in Egypt. Academy of accounting and financial studies journal, 23(3), 40-55.

Emma, G., Isabel, M. & Jennifer, M. (2016). Gender diversity, financial expertise and its effects on accounting quality. Management decision, 55(2), 1-15.

Faiz, C., Amrizah, K. & Nor, M. (2021). Corporate Governance Practice and Accounting Conservatism Level of Malaysian Listed Construction Companies. Academy of strategic management journal, 20 (6), 1-20.

Givoly, D., & Hayn, C. (2000). The changing time-series properties of earnings, cash flows and

accruals: Has financial reporting become more conservative? Journal of accounting & economics, 29(3), 287-320.

Idil, K. & Destan, H. (2021). Accounting conservatism and sustainability reporting in changing times: evidence from Turkish banking industry. Muhasebe bilim dünyası dergisi, 23(1), 1-23.

Jensen, M. & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(1), 305-360.

Kamarul, B., Noor, A. & Azlan, Z. (2014). Board size and accounting conservatism of Malaysian listed firms. Australian journal of basic and applied sciences, 8(23): 207-211.

Liang, S., Chen, D., Fu, B. & Fang, K. (2017). Independent directors’ board networks and accounting conservatism. China journal of accounting studies, 5(2), 173–195.

Makhlouf, M., Al-Sufy, F. & Almubaideen, H. (2018). Board diversity and accounting conservatism: evidence from Jordan. International business research, 11(7), 130-141.

Mejbel, A. (2020). Investigating the impact of board of directors on accounting conservatism in Kuwait. International business research, Canadian center of science and education, 13(9), 1-46.

Mitnick, B. (1975). The theory of agency: The policing ‘paradox’ and regulatory behavior. Public Choice, 24(1), 27–42.

Muhammad, H., Migliori, S. & Paolone, F. (2022). Board gender diversity and accounting conservatism: the role of corporate social responsibility. 19th European Institute for Advanced Studies in Management (EIASM) Conference on Corporate Governance At: EM Strasbourg Business School, France, 1-13.

Nasr, M. & Ntim, G. (2017). Corporate Governance Mechanisms and Accounting Conservatism: Evidence from Egypt. Forthcoming in corporate governance, 1-32.

Nguyen, T., Duong, C., Nguyen, N., & Bui, H. (2019). Accounting conservatism and banking expertise on board of directors. Review of quantitative finance and accounting, 55, 501– 539.

Oleh, P., Fuli, C., Natalia, B. & Natalia, R. (2021). Corporate governance attribute and accounting concervatism: Evidence from China. Studies in business and economics, 16(3), 173-189.

Pereira, C., Monteiro, A., Barbosa, F. & Coutinho, C. (2021). Environmental sustainability disclosure and accounting conservatism. International journal of advanced and applied sciences, 8(9), 63-74.

Ross, S. (1973). The economic theory of agency: The principal’s problem. American Economic Review, 63(2), 134–139.

Rustiarini, N., Gama, A. & Werastuti, D. (2021). Board of Director Characteristics, Institutional Ownership, and Accounting Conservatism. The Indonesian journal of accounting research, 24(2), 289-320.

Salah, A. (2010). Earnings management in the years following the integrated corporate income tax within Dutch housing association. Masters thesis from Erasmus university Rotterdam.

Suleiman, S. (2014). Coporate governance mechanisms and accounting conservatism. Journal of management policies and practices, 2(2), 113-127.

Surachai, A., Jintana, S., Sukanya, W. & Laddawan, S. (2020). Corporate board attributes and

accounting conservatism: Evidence from Thai firms, 12(11).

Taher, H. & Danielle, S. (2015). Corporate Board AttributesAnd Conditional Accounting Conservatism: Evidence From French Firms. The journal of applied business research, 31(3), 871-890.

Wei, L., Xiaoqing, F. & Xiaopin, C. (2011). Board Independence and Accounting Conservatism: Evidence Based on Listed Companies in China. International conference on management and service science, 1-15.

Wang, L. (2015). Board gender diversity and accounting conservatism: Evidence from Finland. Master’s thesis, Oulu business school, 1-74.

Xiping, L., John, W., Jing, L., Shouyu, Y. & Xutang, L. (2022). Does executive gender diversity supply accounting conservatism in traditional societies? Evidence from CEO-CFO combinations in China. Finance research letters, 48(1), 1-15.

Yuner, P., Georgakopoulos, G., Vasileiou, K. & Kafousias, D. (2017). Board Characteristics' Impact on Accounting Conservatism Before and During the Financial Crisis. International journal of corporate finance and accounting, 4(1), 1-22.

Yunos, R., Smith, M., Ismail, Z. & Ahmad, S. (2011). Inside concentrated owners, board of directors and accounting conservatism. Annual summit on business and entrepreneurial studies proceeding, 954-971.


Refbacks

  • There are currently no refbacks.


 

 

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.