UMYU Journal of Accounting and Finance Research

Assessing the Impact of Macroeconomic Variables on the Financial Performance of Commercial Banks in Nigeria

Umar Altine Mohammed — 2024-07-23

This study examines the impact of macroeconomic variables on the financial performance of commercial banks in Nigeria using an annual panel dataset from 2000 to 2022. A sample of seven banks is considered, and four macroeconomic variables are examined: interest rate, exchange rate, inflation rate, and the ratio of money supply to GDP. The panel ARDL model is applied to assess the long-run and short-run relationships between these variables and the banks' financial performance, measured by Return on Assets (ROA). The findings indicate that interest rates have a positive and significant effect on bank performance, while the exchange rate has a negative and significant impact. Inflation rate is not found to be a significant determinant, and a significant negative relationship is observed between the money supply-to-GDP ratio and bank performance. These findings have implications for policymakers, regulators, and commercial banks, emphasizing the need to consider interest rates, exchange rates, and money supply-to-GDP ratio in formulating monetary policies and managing risks to ensure long-term financial stability and performance.

Impact of Currency Redesign and Cashless Policy on Household Standard of Living in Sokoto Metropolis

Adamu Hassan — 2024-06-30

This study investigates the impact of currency redesign and cashless policy implementation on household standard of living in Sokoto Metropolis using a survey dataset for a sample of three hundred and sixty-five (365) respondents. In the analysis, this study used Ordinary Least Squares regression and the results reveal that currency redesign has significant negative effect on household standard of living while the cashless policy has had a positive and significant effect on household living standards. Additionally, broader economic and environmental conditions, such as political instability, transportation costs, climate change, and rising commodity prices, have also played a significant role in shaping household welfare. However, the adverse effects of currency redesign highlight the need for policymakers to carefully manage the implementation of such reforms to minimize disruptions to the economy. The findings suggest that the cashless policy has been effective in driving financial inclusion, reducing transaction costs, and creating economic opportunities for households. Moreover, the significant influence of macroeconomic and environmental factors underscores the importance of adopting a holistic approach to policymaking, addressing both financial sector developments and broader economic challenges. To build on the benefits of the cashless policy, the study recommends that policymakers focus on addressing implementation challenges, strengthening supporting infrastructure, and ensuring the transition is inclusive. Concurrently, efforts should be made to mitigate the negative impacts of currency redesign and other macroeconomic risks through appropriate policy interventions and coordination across relevant sectors. By adopting this comprehensive approach, Nigeria can maximize the potential of the cashless economy to drive sustainable economic development and improve the overall standard of living for its citizens.

Audit Committee Attributes and Financial Performance of Listed Oil and Gas Firms in Nigeria

Emmanuel Umoru Osi — 2024-06-30

The oil and gas sector is the backbone of the Nigerian economy and it is pertinent to ensure that that those saddled with the responsibility of directing the affairs of this crucial sector have the requisite attributes that would impact positively on overall performance. The audit committee is a key component of a company's corporate governance structure, providing oversight and ensuring the integrity of financial reporting and internal controls. However, there have been contentions on the attributes of the AC that can improve a company’s performance. This study investigated the effect of audit committee attributes on financial performance of quoted oil and gas firms in Nigeria. This study employed a causal research design and secondary data were obtained from the annual reports of ten (10) quoted oil and gas companies on the floor of the Nigerian Exchange Group (NGX) were utilized for a period of seven (7) years (2015 – 2021). The Panel Least Square (PLS) regression technique was employed in estimating the data and testing the formulated hypotheses. Based on the analysis, the results showed that there is a negative and insignificant relationship between audit committee size (ACSIZ) and audit committee gender diversity (ACGED) on financial performance (FPER) while audit committee independence (ACIND) and audit committee meeting (ACMEET) all have a positive and insignificant effect on Financial Performance. Audit committee financial expertise is the only explanatory variable that has positive and significant effect on financial performance. In line with the findings, members of the audit committee of listed oil and gas companies should have the requisite financial expertise in order for them to be able to make strategic and financial decisions that would impact positively on financial performance.

Effect of Fuel Subsidy Removal on Commodity Prices in Sokoto Metropolis, Sokoto State, Nigeria

Samaila Ladan Muhammed — 2024-06-30

This study examines the impact of fuel subsidy removal, on commodity prices in Sokoto metropolis using a survey dataset for a sample of 339 respondents. In the model the dependent variable is commodity price while the independents variables are fuel subsidy removal, transportation costs and costs of electricity. In the estimation however, this study applied Ordinary Least Squares regression and the results indicate that fuel subsidy removal has a positive and statistically significant effect on commodity prices. This suggests that as the government has phased out fuel subsidies, the resulting increase in energy and transportation costs has been passed on to consumers through higher prices for a wide range of essential goods. Moreover, the study finds that transportation costs play a significant role in determining commodity prices. This highlights the significant pass-through of higher logistics expenses to consumers, underscoring the need to improve the efficiency and affordability of transportation infrastructure. Additionally, the analysis reveals that electricity costs also have a significant impact on commodity prices. As energy expenses rise, producers and distributors must incorporate these higher costs into the prices they charge. This points to the importance of addressing the drivers of increasing electricity prices, such as power generation, transmission, and distribution costs.

Proposed Theoretical Research Framework for the Adoption of International Public Sector Accounting Standards: Application of Diffusion of Innovation Theory

Sulaiman Umar Musa — 2024-06-30

This paper proposes a theoretical research framework for the adoption of International Public Sector Accounting Standards (IPSAS) in Kaduna State, Nigeria, grounded in the Diffusion of Innovation (DOI) theory. The framework aims to elucidate the process through which IPSAS can be effectively integrated into the public sector accounting practices of Kaduna State. By leveraging DOI theory, which examines how innovations spread within a social system, the proposed framework identifies and analyzes key factors influencing IPSAS adoption, including the perceived attributes of the innovation (relative advantage, compatibility, complexity, trialability, and observability), the role of communication channels, and the influence of social systems and opinion leaders. The framework also considers the stages of adoption, from awareness to full implementation, and the potential barriers and facilitators encountered at each stage. This theoretical framework is designed to offer a comprehensive understanding of the adoption dynamics, providing valuable insights for policymakers, accounting practitioners, and stakeholders involved in advancing public sector financial management reforms. The proposed framework contributes to the academic discourse on public sector accounting by offering a structured approach to the adoption of international standards in a specific regional context.

Forensic Accounting and Financial Reporting Quality of Listed Deposit Money Banks in Nigeria

Okiki Isaac Oyedokun — 2024-06-30

Economic volatility and stakeholder dissatisfaction such as inadequate regulatory monitoring, public sector inefficiency, corporate governance issue, financial reporting irregularities, weakness in traditional auditing widespread corruption and financial mismanagement have led requests for improved financial system protection, necessitating the implementation of forensic accounting. This research was initiated to explore the impact of forensic accounting on financial reporting quality in Nigerian listed deposit money banks (DMBs). The longitudinal research included 10 DMBs listed on the Nigerian Exchange Group as of December 31, 2022. The rationale behind selecting 10 DMBs is based on DMBs with largest asset base. The data which includes investigative accounting and litigation support services was examined by descriptive statistics and ordinary least squares regression. This study discovered that investigative accounting has a positive and significant (coefficient = 0.0034, p-value = 0.0000) effect on the financial reporting quality of listed DMBS in Nigeria. The study also discovered that litigation support services have a positive and significant effect (coefficient = 0.0007, p-value = 0.0000) on the financial reporting quality of listed DMBS in Nigeria. On overall result shows that forensic accounting has a negative and significant effect on the financial reporting quality of listed DMBS in Nigeria. This research concludes that forensic accounting assist DMBs improve financial reporting quality. It was recommended that DMBs priorities the adoption and implementation of forensic accounting practices. This can be achieved by creating a dedicated forensic accounting unit within the bank to handle all fraud detection and prevention activities, implementing a robust internal control and investing in forensic accountants' training and continuous professional development, as well as providing financial professionals with the necessary skills and tools.

The Link between Corporate Board and Financial Performance: Evidence From Money Deposit Banks in Nigeria

Musa Muhammad Musa — 2024-06-30

This study investigates the effect of board structure on financial performance of listed DMBs in Nigeria, using a sample of ten (10) DMBs. The study covers a period of 10years (2011-2020) and employed correlation research design. Random effect regression was adopted. The study found that gender diversity on board has a statistically significant positive effect on the financial performance of listed DMBs in Nigeria. The regression result shows that increasing the size of the board does not affect financial performance. The regression analysis also revealed that increasing the number of meetings held per year does not have significant effect on the profitability. Thus, increasing the number of meetings held in a year is not necessarily going to improve financial performance. It is recommended that listed DMBs should focus on expanding the quota of female directors serving on the board, as this will help to increase the companies' profitability potential.

Assessing the Impact of Financial Inclusion on the Performance of Small and Medium Enterprises (SMEs) in Sokoto State

Chika Abubakar Malam — 2024-06-30

This study investigates the role of financial inclusion in driving the performance of small and medium enterprises (SMEs) in Sokoto State, Nigeria. Drawing on survey data collected from a sample of 367 SME owners and managers, the study employs robust regression techniques to analyze the relationships between various dimensions of financial inclusion, including financial literacy, financial self-efficacy, financial attitudes, and financial social networks, and key SME performance indicators. The findings offer a comprehensive and compelling blueprint for leveraging financial inclusion to propel the success and growth of SMEs in the study area. The results unequivocally underscore the pivotal importance of financial literacy, underscoring the urgent need for widespread financial education initiatives to empower SME stakeholders with the knowledge and skills for informed financial decision-making. Equally significant is the study's revelation of the counterproductive impact of overconfidence in financial self-efficacy, necessitating targeted interventions to cultivate a realistic and adaptive financial mindset. Furthermore, the profound influence of positive financial attitudes highlights the critical role of fostering a proactive and favorable financial mindset among SME owners and managers. The recognition of the value of leveraging financial social networks also provides a clear path for strengthening the collaborative and information-sharing ecosystem within the SME community.

Determinants of Entrepreneurial Intentions among the Undergraduate Students of Umaru Musa Yar’adua University, Katsina

Jafaru Abdu Gambarawa — 2024-06-30

The paper examines the determinants of entrepreneurial intentions among undergraduate students of Umaru Musa Yar’adua University, with a view to identifying whether these factors can influence entrepreneurial behaviour. A multistage sampling technique via purposive, stratified and random sampling were used for the selection of three hundred and forty-two (342) respondents from the Department of Biology, Islamic Studies, Accounting, Education and Law programmes of the university respectively. Out of which three hundred and two (302) respondents completed and returned the questionnaires. Two hundred and sixty-four (264) of which were found worthy for analysis. The paper used a structured questionnaire to collect data. The data were analysed using Univariate analysis (frequency, mean and standard deviation) and Pearson Product Moment Correlation (PPMC) was employed to test the hypothesis. The findings revealed that the entrepreneurial determinants have a significant influence on students’ intention. The outcome of the study also found out that there is a significant relationship between entrepreneurial determinants and entrepreneurial intentions. The study recommends that the entrepreneurial intentions of undergraduates’ students can be enhance through entrepreneurial learning as well as establishing collaborations with private businesses and other universities in order to nurture and promote students’ intentions towards entrepreneurship.

Assessing the Effect of Insecurity on Food Production in the Eastern Part of Sokoto, Sokoto State, Nigeria

Sa’idu Tanko — 2024-06-30

This study examines the effects of insecurity on food production in the Sokoto East Senatorial Zone, Nigeria using a survey data for a sample of three hundred and fifty-five (355) respondents. In the model the dependent variable is food production while the independent variables are insecurity and other factors such as climate change, access to inputs, and farming techniques. In the estimation, the study used Ordinary Least Square regression and the results show that that insecurity has a significant negative impact on food production in the study area. Additionally, the study finds that other factors, including limited access to inputs, inadequate infrastructure, and unfavorable weather conditions, also contribute to a reduction in food production. These findings emphasize the need for policymakers and stakeholders to address issues of insecurity and other related factors to enhance food production and ensure food security in the Sokoto East Senatorial Zone. Implementing measures to improve security, provide better access to resources, and promote resilient farming practices will be crucial in mitigating the negative impacts on food production.

Sustained Public Policies and National Integration in Nigeria: The Inevitability of Effective Human Resource Analysis

Nura Allumi Abubakar — 2024-06-30

Since after Nigeria’s independence, keeping the country unified has not been an easy task. Several administrations tried several public policies, up to the moment there are clamors of marginalization and threats of secession. Through the use of extant literature as well as policy instruments, this paper attempts to examine the challenges from the perspective of human resource management (HRM) perspective. The study employs documentary analysis which is a social research technique and is a significant research machination in its own right and is a central part of most schemes of triangulation. The paper argues that the success of public policies which is evident in their continuity revolves around a number of factors and situations that are multifaceted in nature such as economic, social, political and technical. It was also concluded that the factors have a symbiosis rapport among them. It is recommended that comprehensive human resource analysis frameworks should be implemented because it is essential for aligning public policies with effective execution and fostering national integration in Nigeria.

Effect of Organizaional Development Towards Organizational Commitment: Moderating Role of Personality

Mubarak Hamza — 2024-06-30

The current economic landscape has presented many challenges, leading to heightened employee mobility as individuals seek better opportunities and working conditions. This study examines the relationship between organizational development and employee commitment with reference to seven (7) general hospitals in Katsina State. The study is quantitative and simple random sampling technique was utilized. Three hundred and fifty (350) copies of questionnaire were administered to staff of seven general hospitals in Katsina State. Data collected were analysed using SPSS and SMART-PLS. The findings of the study revealed that reward system, career growth and customer service have significant relationship with organizational commitment. Moreover, the study also revealed that personality moderate the relationship of reward systems and career growth towards organizational commitment. While there is no moderation effect of personality on customer service towards organizational commitment. This means that, employees that enjoys effective reward system, having chances to achieve their career aspiration tend to show high level of commitment to the commitment, which in turn ensure retention and organizational effectiveness. The research recommends that organisations should design and ensure effective implementation of organizational development strategies in order to enhance the commitment of workers, ensure retention and organizational effectiveness.

The Applicability of Forensics to Government Accounting System in Ministries and Departments of the Northwestern States of Nigeria

Sagir Lawal — 2024-07-23

This study examines the applicability of forensics to government accounting system in ministries and departments of North-Western states of Nigeria. The study used survey research design within the positive accounting theory. The study utilized primary data via the use of questionnaires administered to accountants, internal and external auditors from the seven (7) states of the North-Western geo-political zone of Nigeria. The population of the study consisted of all the Ministries in the Northwestern States of Nigeria with 1636 accountants, internal and external auditors on grade level 12 and above for the 2024 budget year estimate. Assessment of Measurement Model, namely individual item reliability, internal consistency reliability, convergent validity, and discriminant validity, was conducted to confirm the reliability and validity of the data collected for the study. Also, the Assessment of Structural Model namely Hypothesis testing for Direct Relationship, Coefficient of Determination, Effect Size Model, Predictive relevance, of the Model, Predictive Power of the Model (PLS Predict) and the Importance Performance Map (IPMA) was conducted to examine the relationship between endogenous latent construct (applicability of forensic accounting) and the exogenous latent constructs (educational, legal, behavioural, political and environmental factors). The findings of the study indicated that both the legal factors, behavioural factors, educational factors, environmental factors as well as political factors are significantly and positively related to the applicability of forensics to government accounting system in ministries and departments of the North-Western states of Nigeria. It is recommended that the state House of Assemblies in the North-western states should (enact) pass laws backing the conduct of forensic accounting at the state level this will facilitate it application to detect and prevent fraud, also the Regulatory agencies and professional bodies should ensure the provision of guidelines and standards to regulate forensic accounting activities at the state government level.

Assessing the Impact of Credit Risk Management on Performance of Deposit Money banks in Nigeria

Toluwa Celestine Oladele — 2024-08-02

The banking sector is a major driver of economic prosperity, and this has stimulated the implementation of many reforms over time, aimed at enhancing the system's efficiency and bolstering its capacity for expansion. Although these steps have been implemented, the Nigerian banking system still faces challenges in terms of poor credit management and an increase in non-performing loans. This study, therefore, investigated the effect of reforms and credit management on the performance of deposit money banks in Nigeria. The study's population comprised all deposit money banks that were listed on the Nigeria Exchange Limited as of December 31st, 2023. The study utilised secondary data obtained from the audited reports of the selected banks and the Nigeria Exchange Limited factbook, spanning a duration of 14 years (2010-2023). The estimation approach used was the fixed and random effect regression. The findings indicated all variables employed for measuring credit risk management have a significant effect on financial performance deposit money banks in Nigeria. For the operational performance, all the variables except LATD have a significant effect on operational performance of banks in Nigeria. Also, the findings indicated that reform(s) is a significant driver of bank performance in Nigeria. Therefore, the study concluded that credit risk management plays a crucial role in influencing the performance of banks in Nigeria. Consequently, the study, therefore, recommended that Nigerian banks credit risk management should be well entrenched in banks risk management and assessment because of its ability to influence bank performance. Furthermore, it is imperative for regulatory authorities such as the CBN to regularly undertake reforms aimed at enhancing the resilience of the banking industry and enhancing its overall performance.

Impact of Information Technology Governance Mechanisms on Public Sector Financial Performance in Bauchi State, Nigeria

Nana Mohammed — 2024-08-02

The aim of this paper is to examine the impact of IT governance mechanisms (ITG structures, ITG process, ITG relational mechanisms) on public sector financial performance in Bauchi state. The paper adopts cross-sectional survey research design and collected primary data using structured questionnaire. The population was 2316 staffs of the five selected MDAs within Bauchi state where the sample of 331 staff were selected using Krejcie and Morgan table. The data collected was analyzed using multiple regression technique with the help of SPSS version 23. The paper found that IT governance structures and processes have significant positive effect on public sector financial performance in Bauchi state. In line with the findings, the paper concludes that IT governance and its mechanisms serve as an effective tool for managing the state financial resources address the problem of inefficient service delivery inherent to public sector operations in Bauchi state. In view of the finding and conclusion outlined, it was recommended that Bauchi state public entities should implement a robust system of monitoring and evaluation of IT governance structures by regularly assessing the key performance indicators related to cost reduction, revenue enhancement and operational efficiency. They should also revisit their strategic objectives and financial goals to clarify how IT governance processes can fit in to contribute in achieving these objectives. Finally, government should contribute by enacting, implementing and enforcing enabling law that guides how IT resources of public entities should be governed in such a way that revenue accrued to the government is improved.

Factors that Determine Agency Banking Adoption in the Nigerian Banking Industry

Adamu Imam Bello — 2024-08-02

The aim of this paper is to examine the factors that determine agency banking adoption in Nigeria using an extended Technology Acceptance Model (TAM). The population of the study is 307,000 agent bank branches as report by Nigeria Inter-Bank Settlement System (NIBSS) in 2022. Krejcie and Morgan Table was employed to determine the appropriate sample size and arrives at 384 where convenient sampling technique was employed based on willingness and ability to participate. The collected data was analyzed and hypotheses were tested using Structural Equation Modelling with SmartPLS software. The finding revealed that perceived usefulness perceived trust and perceived risk have significant positive effect on agency banking adoption in Nigeria, whereas perceived ease of use was insignificantly related. It is then conclude that adopting agency banking is likely to grow as long as the service providers are eager to seek and address the consumers’ financial needs through the agency services in a way that improve its usefulness, simplicity and minimize the applicable risks. In view of that, it is recommended that Nigerian government should create supportive regulatory environment by establishing clear guidelines, licensing requirement and consumer protection measures to ensure the safety, integrity and accessibility of hitch-free agency banking channels. Finally, banks should promote transparency and risk disclosure mechanisms in agency process in order to enable consumers make informed decisions.

Corporate Income Tax Burden on Liquidity Of Listed DMBs in Nigeria

Ahmed Hadiza Suleiman — 2024-08-03

This study assesses the effect of corporate income tax burden on liquidity of listed deposit money banks in Nigeria from 2018 to 2022. The entire fourteen listed deposit money banks served as population of the study. Data ware obtained from annual reports and accounts of the banks. Correlation analysis and panel analysis were used within this framework. Panel multiple regression analysis is used to manipulate the dependent variable that is, liquidity measured by cash ratio, independent variable corporate income tax burden measured by marginal tax rate and tax expense and control variable used was bank’s age. The result reveals that, marginal tax rate has significant positive effect on liquidity and tax expense has negative significant effect on liquidity. On the control variable bank’s age indicates a positive significant effect on liquidity among listed deposit money banks in Nigeria. The study recommends among others that, Nigerian banks should focus on tax planning strategies, such as utilizing tax incentives and credits, structuring tax efficient transactions and managing tax risks effectively. By doing so, the firms can potentially enhance their financial performance and increase their liquidity position and could encourage banking sector’s growth and development.