1_THE IMPACT OF COMPLIANCE WITH ACCOUNTING CRITERIA ON ASSET AND SUCCESS OF NIGERIAN QUOTED COMPANIES

 1_THE INFLUENCE OF COMPLIANCE WITH ACCOUNTING STANDARDS ABOUT ASSET AND PROFITABILITY OF NIGERIAN QUOTED COMPANIES Dissertation

The Record of Business, Vol. several, No . 3

ISSN: 2218-8118, 2220-6043

Hailey College of Commerce, University of the Punjab, PAKISTAN

THE EFFECT OF COMPLIANCE WITH ACCOUNTING STANDARDS

IN ASSET AND PROFITABILITY OF NIGERIAN OFFERED

COMPANIES

basis with the purpose of ensuring that better

business methods are enforced using the

device of standardization and that

requirements should be better complied with by

companies.

Abubakar Sadiq Kasum, W. Sc., Meters. Sc., Ph. D.,

ACA1.

Abstract

The principal reason for standardization is to

safeguard the passions of both shareholders and

other stakeholders. The level earnings and

extent to which business assets happen to be secured,

consequently become important items of matter to

all stakeholders. Prior to standardization may

be considered to be effective it must protect the

important products. The objective of this study,

therefore , was to analyze the impact that

compliance have got on profitability and asset

value.

Keywords and phrases: Compliance; Accounting Standards;

Assets; Profitability; Nigeria Quoted Corporations

INTRODUCTION

Liberty of incorporation prevails throughout the

world, and that includes in Nigeria.

In the

same manner, businesses grew consistently

and more and even more people continue to own

shares. Ownership of companies is diverse and

broadly spread. The owners hardly ever control the

corporations, rather, managers were running

the business at their particular whims and accountable to

no one (Drutman, 2005). Many owners consider little

affinity for the manner of management of their

companies and managers got few implications

for mismanagement. " This kind of meant that managers

could easier use the corporation to enrich

themselves, which they significantly did”

(Drutman, 2005). This kind of era started out around 1844

when the English Company Take action was enacted

and it continued until the stock market crash of

1926.

Forty-four businesses that existed before the

starting of standardization in Nigeria in 1984

and which may have unbroken economic records with

the Nigerian Stock Exchange, had been sampled intended for

the study. Success, asset and compliance

info of the companies were accumulated from the

Nigerian Stock Exchange and annual reviews of

businesses. Pearson Merchandise Moment and

Spearman's Rank Correlation statistics were

accustomed to test the effect of compliance, while

college student ‘T' statistic was used to investigate the

degree to complying.

The study showed that Nigerian companies

moderately comply with accounting standards

however the level of compliance is below the

international standard. The study also

showed that compliance triggered improved

earnings and larger net-asset, but the

improvements are generally not significant.

Relating to Giroux (1999), monopoly practices,

price

fixing,

speculation,

and

industry

manipulation are part of the „Big Business‟

tales, so are the industry collapse of 1929 and

the Great Despression symptoms. This substantial market

failure led to bigger and increased government

regulations, including the investments markets and

on the procedure for financial revealing. Accounting

started to be highly governed, directly, due to

government response to the perceived market

and accounting abuses.

The study therefore concluded that corporate

compliance to accounting standards still leaves

room intended for improvement and has not helped bring

about improvement that is significant enough.

The research recommended and others, that

requirements should be reviewed on ongoing

The depressive disorder experienced in the usa

of America‟s economy about 1929, which will

witnessed businesses reaping away, especially, the

dispersed buyers masses, along with

devastating insider related manipulations could

be said to be the foundation of Accounting

1

Division of Accounting and Financial,

University of Ilorin, Ilorin, Nigeria

Email:

[email protected] com

or

[email protected] edu. ng

57

The Impact of Complying with Accounting Standards upon Assets and Profitability of Nigerian Offered...

References: Adeyemi, S. W. (2005). The Impact of Accounting

Standard about Financial Revealing, Unpublished

Drutman, L. (2003). The History with the

Corporation,

Harris, M. and K. Muller (1999). " The Market

Value of IAS Versus US –

Izedonmi, F. O. (2001). An assessment of The

amount of Banks‟ Complying with Accounting