Edesiri Godsday Okoro1 and Confidence Joel Ihenyen2
Regardless of the viewpoints of prior studies on earnings management, no study has been carried out on whether earnings management exerts pressure on firms’ return on assets and equity, particularly in Sub-Saharan Africa in a single study. Drawing inferences from the existing earnings management models, a dissimilar model of earnings management, unlike those used in prior studies, which may match the peculiarity of Sub-Saharan Africa is developed in this paper. The data used were obtained from the Stock Exchange database of Sub-Saharan African countries by employing the fixed and random effects statistical technique. Using the proposed earnings management model, the study finds the intriguing results that may contribute to knowledge and magnify the literature that, notwithstanding the fact that earnings management exerts significant pressure on firms’ performances, it is even more so deemed as high in South Africa, only to be followed by West Africa, and low in East Africa. Interestingly, the study finds that the size of a firm plays a vital role in moderating the nexus between the earnings management and performances of Sub-Saharan African firms.
Amaechi Patrick Egbunike and Godsday Edesiri Okoro
Quite a few studies have argued that green accounting does matter to the profitability of a firm; however, little is known about Nigerian firms. To address this gap, this paper seeks to investigate whether green accounting matters to the profitability of Nigerian firms or not. Towards achieving this, an expo-facto research design was adopted and ten non-consumer goods firms listed on the Nigerian Stock Exchange were selected during 2012-2016. The data were sourced from the annual reports and accounts of the selected non-consumer goods firms. The data comprised of green accounting (expenses of community involvement and the amount spent on environmental protection) and profitability (return on equity and Tobin Q) indicators. The data obtained were analyzed by using canonical correlations. The study revealed that there was no significant relationship between green accounting and profitability measures among the non-consumer goods firms. The implication is that whether or not firms engage in green accounting, their profitability level remains unchanged. In addition, this provides evidence that the practice of green accounting among non-consumer goods firms in Nigeria is still at its ad-hoc stage. On the basis of the above findings, we proposed that the Financial Reporting Council of Nigeria and corporate entities should, as a matter of fact, accommodate the growing awareness in green accounting and formulate a disclosure requirement aimed at improving the profitability of firms. This will no doubt enhance green accounting practices among firms and in general policies aimed at enhancing their competitiveness in the industry in which they are domiciled.