Tag Archives: Financial Accounting method

Financial Accounting Methods and Executive Compensation: A Comparative Study of Pre and Post IFRS Adoption by Manufacturing Firms (Published)

This paper examines the relationship between financial accounting methods and executive compensation in pre and post IFRS era of manufacturing firms in Nigeria for a 7 year period .Financial accounting variables considered in the study are discretional receivable accruals, discretional inventory accruals and discretional depreciation accruals Tests were conducted to determine whether financial accounting methods variables have any statistically significant relationship with executive compensation variable using simple regression Analysis Executive compensation variable was regressed on financial accounting methods variable on both eras independently. The results from the analysis showed that discretionary accounts receivable accruals and discretionary inventory accrual have no statistically significant relationship with executive compensation of firms in the manufacturing sector of Nigeria in both pre and post IFRS periods. In Contrast to the other two variables of financial accounting methods, discretionary depreciation has significant relationship with remuneration of executive directors implying earnings manipulation and in sync with agency theory.

Keywords: Account Receivable Accruals, Depreciation, Discretional Accruals, Executive Compensation, Financial Accounting method, Pre and Post IFRS Adoption