IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 7 NO. 4 2023
DOI: https://doi.org/10.56201/wjfir.v7.no4.2023.pg75.100

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Accounting Conservatism and Financial Performance of Quoted Non-Financial Firms in Nigeria

Lawrence, U. Egbadju

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Abstract

This study investigates the impact of accounting conservatism on firm financial performance in Nigeria. The study covers the period from 2005 to 2020 of seventy six firms listed on the floor of the Nigerian Exchange Group (NXG) as information about them were extracted from their financial statements. The results of the generalized method of moments (GMM) reveals that while four of the measure of accounting conservatism (WANG-Default Adjusted Basu (DAB; Market-to- Book (MTB); Basu Asymmetric Timeliness of earnings (AT); Ball and Shivakumar Asymetric Accruals to Cashflow Measures (AACF) are positively significant with firm performance (ROA); another four of the measure of accounting conservatism (Givoly and Hyan Non-Operating Negative Accruals;Skewness; Khan and Watts-CSCORE; Andre-Filip-Paugam) are negatively significant with firm performance (ROA) but Beaver and Ryan measure is insignificant.

Accounting conservatism, Performance, Quoted Non-Financial Firms, GMM, NXG.

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References:

Ademola, O. J., & Moses, O. I. (2017). Accounting conservatism and its benefits to shareholders
in developing capital market, evidence from Nigeria. Journal of Accounting and Finance,
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Affes, H. & Sardouk, H. (2016) Accounting conservatism and corporate performance: The
moderating effect of the board of directors. Journal of Business and Financial Affairs,
5(2), 1-8.

Alejo, J., Galvao, A., Montes-Rojas, G. M. & Sosa-Escudero, W. (2015). Tests for normality in linear panel-data models.
The Stata Journal, 15 (3), 822–832

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