ENVIRONMENTAL ACCOUNTING DISCLOSURE AND SUSTAINABLE FINANCIAL PERFORMANCE OF QUOTED BASIC MATERIALS COMPANIES IN NIGERIA

  • Ezekiel Oluwagbemiga OYEROGBA
  • Julius Adeyemi ALAMU
  • Wright Olatunde
Keywords: Accounting Environmental disclosure, Firm Performance, Environmental disclosure index, Return on Capital Employed, Return on Assets

Abstract

This study investigates the link between environmental accounting disclosure and financial performance of listed basic material companies in Nigeria. Specifically, the study investigated the impact of environmental disclosure index on the return on capital employed and return on assets. With the use of total enumeration sampling technique, data were drawn from the 12 companies listed under basic material on the Nigeria stock exchange over a ten-year period from 2010 to2019. Data were analyzed using both descriptive and inferential statistics. The descriptive statistics includes the mean, median, mode, standard deviation and so on. Inferential statistics are univariate t-statistics and multiple regression analysis. The results revealed that there is relatively low disclosure of environmental accounting information in the financial statement of the listed basic material companies in Nigeria. The regression result shows that about 62% of the variation in the dependent variable (ROCE) is explained by the combined effects of environmental accounting disclosure while about 59% of the variation in return on equity was also associated with the combined effect of environmental accounting disclosure. The study therefore concludes that environmental accounting disclosure has significant impact on financial performance of listed basic materials companies in Nigeria. The paper draws the attention of management of listed basic materials in Nigeria to the need to make adequate disclosure on environmental accounting practices in the financial statement. The paper also draws the attention of Nigeria stock exchange and other regulatory authorities to the need for regulation that will make environmental accounting disclosure a regulatory disclosure.

References

Abdullah H., Fuong C. C. 2010. The implementation of ISO 14001 Environmental Management System in Manufacturing Firms in Malaysia Asia Social Science, 6(3)
Akinlo O. O. and Iredele O. O. (2015). Corporate Environmental Disclosures and Market Value of Quoted Companies in Nigeria. The Business and Management Review 5(3).
Al - Tuwaijiri, S. A Christensen, T.E, II.K.H. (2004). The relations among environmental disclosure, environmental performance, and economic performance: a simultaneous equation. approach Accounting, organizations and society, 447-471.
Asuquo, A.I (2012). Environmental friendly polices and their financial effects on corporate performance of selected oil and gas compares in Niger Delta Region of Nigeria American International Journal of Contemporary Research 2(1) 168-173.
Ezeabasiliso, N. (2009). Legal Mechanism for Achieving Environmental Sustainability in Nigeria. African Research Review, 3(2), 369-380
Freedman, M. & Jaggi B. (2012). An Investigation of the Long-run Relationship Between Pollution Disclosure and Economic Performance, Accounting Auditing and Accountability Journal 1,43-58.
Hackston D. & Milne M. J. (2016). “Some Determinants of Social and Environmental Disclosures in New Zealand Compares”. Accounting, Auditing and Accountability Journal, 9(1), 77-108.
Hossam, M. & Andrew, J. (2006). “Corporate Social and Environmental”. Disclosure in Developing Countries. Evidence from Bangladesh”, Asia Pacific Conference on International Accounting Issues, Hawi October 2006.
Kayode, O. F. (2011). Environmental Accounting Concept and Principles; The Certified National Accountant, Volume 19, No. 2.
Kundra S. (2013). “Environmental Disclosure Practices by Compares in India: A Study of Nifty Companies Pacific Business Review International 6(2), 66-73.
LA Times (2015). “Organizing the World” 1 December, http://www.latimes.com/world/europe/la-fg-climate -change-talks-paris-updates-htmlstory.html accessed 15 January 2016.
Ndukwe O. D. and John C. O. (2015). Determinants of Environmental Disclosures in Nigeria. A Case Study of Oil and Gas Companies. International Journal of Financial and Accounting.
Nyirenda, G., Ngwakwe, C. C., Ambe, C. M. (2013). Environmental Management Practices and Firm Performance in a South African Mining Firm. Managing Global Transition, 11(3), 243-260.
Oba, V. C. Fadio, M. I. & Soje, B. (2012). The Value of Environmental Responsibility Information Disclosure in Nigeria. (ECONOMICA; 6(8), 100-113).
Oeyozo, J. Samy, M. & Bampton, R. (2011). “An Examination of Corporate Social Responsibility and Financial Performance: A Study of the 50. Indonesian Listed Corporation Journal of Global Responsibility, 2(1). 100-112.
Oraka A. O. & Egbunika F. C. (2016). Appraisal of Environmental Accounting Information in the Financial Statements of Consumer Goods Manufacturing Compares in Nigeria N. Journal of Social Development. Vol. 5 October 2016.
Oyedokun, Egberonyinemo and Tonademukaila (2019). Environmental Accounting Disclosure and Firm Value of Industrial Goods Companies in Nigeria. Journal of Economics and Finance (IOSR.JEF) Volume 10 Issue 1 Ser. III Pp 07-27.
Oyerogba, E.O. Alade, M.E. Idode, P.E. & Ogungbade, O.I. (2017) “Impact of board oversight functions on the performance of listed companies in Nigeria”, Journal of Accounting and Management Information System, vol. 16 (3): 143-151
Plumlee M., Brown D. Hayes, & Marshall R. S. (2015). Voluntary Environmental Disclosures Quality and Firm Value: Further Evidence Journal of Accounting and Public Policy. Retrieved 8, 24, 2015.
Rezaei, F.M. and Mohd-Saleh, N. (2018), “Audit report lag: the role of auditor type and increased competition in the audit market”, Accounting & Finance, Vol. 58 No. 3, pp. 885-920.
Rusmin, R. and Evans, J. (2017), “Audit quality and audit report lag: case of Indonesian listed companies”, Asian Review of Accounting, Vol. 25 No. 2, pp. 191-210.
Saleh, M., Zulkili, N. Muhammed R. (2011). Looking for Evidence of The Relationship Between. Corporative Social Responsibility and Corporate Financial Performance in an Emerging Market Asia Pacific Journal of Business Administration 3(2), 165-190.
Salleh, Z., Baatwah, S.R. and Ahmad, N. (2017), “Audit committee financial expertise and audit report lag: Malaysia further insight”, Asian Journal of Accounting and Governance, Vol. 8 No. 1, pp. 137-150.
Shin, I.-L., Lee, H.-Y., Lee, H.-A. and Son, M. (2016), “How does human resource investment in internal control affect audit reporting lag?”, Asia-Pacific Journal of Accounting & Economics, Vol. 24 Nos 1-2, pp. 195-215.
Sultana, N., Singh, H. and Van der Zahn, J.-L.W.M. (2015), “Audit committee characteristics and audit report lag”, International Journal of Auditing, Vol. 19 No. 2, pp. 72-87.
Swanson, Z. and Zhang, Y. (2018), “Do covenant violations affect audit report timeliness?”, International Journal of Accounting, Auditing and Performance Evaluation, Vol. 14 No. 1, pp. 1-23.
Published
2023-12-26