Regulatory agencies and creative accounting practices in Nigeria

  • Received February 20, 2020;
    Accepted June 3, 2020;
    Published October 12, 2020
  • Author(s)
    Paul Olojede
    ORCID , Francis Iyoha ,
    Ben-Caleb Egbide
    ORCID Researcher ID ,
    Olayinka Erin
    ORCID
  • DOI
    http://dx.doi.org/10.21511/ppm.18(3).2020.38
  • Article Info
    Volume 18 2020, Issue #3, pp. 465-478
  • TO CITE АНОТАЦІЯ
  • Cited by
    8 articles
  • 1074 Views
  • 1157 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Regulation and regulatory agencies are to serve as external control mechanisms to ensure that the financial statements provide a fair view of the company’s operating performance and financial position, free of any unethical practice and suitable for all stakeholders’ needs. Despite the increasing importance of regulatory agencies in enforcing compliance with the standards and laws, it occupies a limited space in accounting research. This study, therefore, investigated the impact of regulatory agencies on creative accounting practices. The study used descriptive and survey research design to achieve its aim. It employed a multi-stage sampling technique, also questionnaires were distributed among 405 respondents consisting of preparers of accounts, users of accounts, and regulators. Out of the number distributed, the respondents returned 241 copies, and all of them were found suitable. The study used Ordinary Least Squares (OLS) to analyze the data and test the hypothesis. The empirical findings showed that the regulatory agencies jointly show a significant impact on creative accounting practices, but the level of contribution to the overall impact by each regulatory agency varies. The study concludes that Nigeria’s regulatory agencies are weak and inefficient in enforcing compliance with the relevant rules. The study recommends that the institutional capacity of the regulatory agencies should be strengthened by enforcing compliance with financial reporting rules and regulation. Most of these agencies should develop capacity in the areas of manpower, information technology infrastructures, and funding.

Acknowledgment
The authors acknowledge Covenant University who has solely provided the platform for this research and has also fully sponsored the research cluster search for data across the country.

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    • Table 1. Independent variables descriptive statistics summary
    • Table 2. Correlation matrix
    • Table 3. Regression results
    • Conceptualization
      Paul Olojede
    • Data curation
      Paul Olojede
    • Methodology
      Paul Olojede
    • Project administration
      Paul Olojede, Ben-Caleb Egbide
    • Resources
      Paul Olojede, Olayinka Erin
    • Writing – original draft
      Paul Olojede
    • Supervision
      Francis Iyoha, Ben-Caleb Egbide
    • Validation
      Francis Iyoha, Ben-Caleb Egbide
    • Writing – review & editing
      Francis Iyoha, Ben-Caleb Egbide, Olayinka Erin
    • Software
      Olayinka Erin
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