Tag Archives: Financial Statement

Human Resource Accounting: Implication for The Financial Statement in Nigeria (Published)

Human Resource Accounting is receiving serious attention by Accountants all over the globe and this paper is a contribution to such debate. This study examines Human Resource accounting and its implication on Financial Statement. The study made use of secondary data in achieving its objective. Works of several Scholars were analysed to arrive at the objective of the study). Two models of accounting for Human Resource in the financial statement in Nigeria were recommended. The first being-The Capitalisation Model: All expenditure incurred in hiring a staff aside the cost of advertisement should be capitalized and amortised against revenue for 3 years.. The second recommendation is the Realisation model: Employee personal Ledger should be opened and debited with the cost of hiring such employee. The contribution of such employee should be tracked in the form of cost savings and revenue generation and should be credited to the employee personal ledger. At the end of the year, the balance on the personal ledger should be moved to the Financial statement as either an asset or a liability. In this case asset will emerge when the employee has a Credit balance while a liability will emerge when such employee has a debit balance.

Keywords: Accounting, Financial Statement, Human resource, Implication, Nigeria

Financial statement fraud likelihood determinants in micro financial institutions in Cameroon (Published)

The state of health of an organisation is scientifically diagnosed from its financial statements. Where the financial statements’ quality is compromised, decisions taken based on such fraud infected financial statements could lead to devastating consequences. Many consumers of micro-financial services, sometimes express worries about the quality of financial reports issued. These worries are further compounded by empirical studies which disclose that financial statement fraud though the least common, is the most costly to an organisation. As a consequence this study sets out to investigate the financial statement fraud likelihood determinants prevalent in micro financial institutions in Cameroon. Data was collected through a survey, analysed and regressed. The empirical results revealed that fraudulent audit confirmations, falsification of financial amounts, alteration of accounting records, misrepresentations, and improper capitalisation of expenses are the main likelihood determinants. Although financial statement fraud cannot be completely eradicated given that they are perpetuated by human beings who themselves are imperfect, it can be significantly mitigated when micro financial institutions become conscious of the events or conditions that motivate the commission of financial statement fraud. Micro financial institutions are encouraged to create enabling environment for the stagnation of these elements by strengthening the internal control systems of assets, liabilities, expenses, and revenues. Independent audits be carried out irregularly, perpetrators of fraud held responsible, and employees treated decently and fairly. Management should introduce financial management ethics to employees and be very sensitive to behavioural red flags.


Keywords: Financial Statement, Fraud, bid rigging, falsification, fraudulent audit confirmation, improper capitalisation of expenses., micro-financial institutions, misrepresentation

Dynamic Analysis of Financial Statement Fraud on Profitability of Manufacturing Firms in Nigeria (Published)

The aim of this research study is to assess the impact of financial statement fraud on profitability of selected Nigerian manufacturing firms covering (2002-2016). The specific objectives focused on ascertaining the effect of variables of financial statement fraud on return on assets (ROA). To achieve these objective, descriptive research design was used for the study while secondary data was collected from the financial reports of the selected firms and website of Security and Exchange Commission. The Analysis of Covariance (ANCOVA) was used and STATA II econometric method was adopted in the analysis of the data. Beneish model was adopted in the analysis of the financial reports to create a dummy variable for the selected firms from 2002-2016 and validation of the parameters were ascertained using various statistical techniques such as t-test, co-efficient of determination (R2), F-statistics and Wald chi-square. Three hypotheses were formulated and tested using the t-statistics at 5% level of significance. The findings of the analysis revealed that there is a significant relationship between financial statement fraud and profitability in Nigerian manufacturing industry. It was found that increase in fictitious revenue in manufacturing industry would lead to low profitability. The implication of this is that increase in fictitious revenue would lead to decrease in performance. The study therefore recommended that pragmatic policy options need to be taken in the manufacturing industry to effectively manage fictitious revenue, in order to enhance manufacturing industry performance in the country and also financial statement fraud should be adequately inculcated into the internal control system of manufacturing firms for the effective running of the manufacturing industry in Nigeria.

Keywords: Beneish Model, Fictitious Revenue, Financial Statement, Fraud, Profitability

The Role of External Auditors in Error and Fraud Discovered in the Financial Statements in the Jordanian Public Shareholding Companies (Industrial) (Published)

The Purpose of this study is to identify the role of external auditors in error and fraud discovered in the financial statements in the Public shareholding industrial Companies in Jordan. It is also about recognizing the role of external auditors with the duties assigned to them when auditing financial statements and discovering error and fraud in those statements. The current study also concentrated on the principle of confidentiality whether it should prevent the external auditor from informing the competent authorities about any fraud or error that takes place in the company they are auditing. The researcher chose a random sample of external auditors affiliated to Jordan Association of certified public Accountants, who audited the financial statements of the public shareholding industrial companies in Jordan. The study produced a set of important results and recommendations the most prominent of which was that there is a statistically significant relationship between the prompt reporting by the auditor about the existence of error or fraud cases and the maintenance of privacy towards the establishment they are reviewing its accounts. There is also a statistically significant relationship between uncovering error and fraud in the financial statements of the companies and the responsibility shouldered by the external auditor. The researcher also advises the shareholders to follow up the financial systems of the companies they participate in and to demand for periodical modernization of those systems.

Keywords: Auditors, Error, Financial Statement, Fraud, Jodan, Shareholding Company


The significant value in financial statement is denoted by the non –current assets. The implementation of the International financial reporting standard in Nigeria commenced in the year 2012 which insisted on the implementation of impairment of assets (IAS 36) and how the impairment loss should be recognised .According to Beisland, Hamberg and Navak, 2010 , one is not aware of any expansive study that has explored the subject of value relevance of accounting information in Nigeria., This study attempts to fill the gap in literature by assessing the disclosure of impairment of assets in Nigerian Banks. The objective of this study is to investigate the level of compliance of Nigerian banks with impairment of non – current assets (IAS 36) in their year 2012 financial reports and also the no of banks which disclosed additional information on significant impairment of assets on their financial statements for the year 2012 . For this study, eleven banks were selected out of the twenty two banks. The disclosure of impairment was analysed by using descriptive statistics. The results of the research showed an increase in the number of Banks which disclosed impairment losses as well as the value of impairment losses. It is expected that there will be an improvement in the extent of disclosure in the subsequent annual reports.

Keywords: : Impairment Of Non- Current Assets, Disclosure, Financial Statement, Impairment Losses.

The Impact of Information Disclosure on Goodwill Impairment in Merger and Acquisition Decision in Nigerian Banks (Published)

The need for quality accounting information is to bring investors’ in an economy. Investors require financial position of business asset to be prepared in line with the international accounting standards. Goodwill as an asset requires quality reporting in accordance to the Nigerian GAAP. Provision of goodwill impairment in Nigerian banks has been provided on SAS26 for Financial information. Questionnaires were administered to the bank staff and preparers of financial statements for banks. 10 banks were selected for the study. Chi-square was used as a statistical tool from the data analysis. Form the study it was found that financial reporting in Nigerian universal banks recognized goodwill impairment in a low term for merger and acquisitions. The quality of accounting information disclosure in respect of goodwill has been low. Nigerian universal banks should ensure there is enough information in respect of goodwill impairment before taking merger and acquisition decision as this will foster quality decision. Also Nigerian universal banks should providing adequate and accurate information in foot notes of financial statement in respect of goodwill impairment

Keywords: : Goodwill impairment, Financial Statement, Information, Nigerian GAAP, SAS 26

The Governance Capability to Support Accounting & Financial Disclosure in the financial Statements (Case Study – Industrial Sector) (Review Completed - Accepted)

In the last years we can see increased in attention of disclosure & transparency, because it have an important role to providing the necessary information that will help to improve & understand the financial instrument and improve the joint-stock companies performance in order to provide specific information to be used .then the companies can take the appropriate accounting policies and the best way to risk management, because all the investors need to achieve those goal and maximization wealth in legitimate ways. This study reached to the existence of the basis of an arbitrator & effective governance rules through fit the requirements of the rules of governance with the amount of disclosed in the joint-stock companies under study, that provide a regulatory framework that will help to give an effectively controls all aspects of governance and corporate performance and provide clear legislation sets out the responsibilities to ensure that the interests of public in joint-stock companies.The study proved the existence of an effective working mechanism between stakeholders and the Board of Directors to provide continuity of the company and provide an opportunity for stakeholders to get proper compensation when their rights are violated

Keywords: Disclosure, Financial Statement, Governance, Industrial Sector, Joint-stock Companies, Transparency