Structuring activities into responsibility centers and optimization of resource is a priority in meeting investors’ performance and profitability expectations in both small and large organizations. Studies have shown that to meet these expectations, adequate performance evaluation and reward system are managers’ challenges. This study investigated the effect of responsibility accounting on profitability of listed companies in Nigeria. Ex-post facto research design was adopted. The population was 173 quoted companies on the Nigerian Stock Exchange as at 31st December 2016. Ten companies were selected using stratified and purposive sampling technique. Data were extracted from published financial statements of sampled companies; validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive and inferential (Panel data regression) statistics were used to analyze the data. The study revealed that profitability measured by NPBT, of listed companies in Nigeria is significantly influenced by responsibility accounting (RA), F-Stat=114.56, AdjR2=.0.6964, p=0.000. There is no significant difference in the result of NPBT with and without the control variable of firm size. The result with control variables revealed F-Stat=87.63; AdjR2=0.7242; P=0.000. The study also revealed that RA had a positive significant relationship with EPS with control variables of firm size, F-Stat=6.56, AdjR2=0.1442; P=0.000. However, without control variables, no significant effect of responsibility accounting on EPS was observed as shown in the following result: F-Stat=0.45, AdjR2=-0.0112, p=0.64. Furthermore, the study revealed that profitability measured by ROA exhibited an insignificant relationship with RA given the following results, AdjR2=0.0089; P=0.000. RA with control variables of firm size, insignificantly affected ROA while Firm Size exerted significant positive effect on ROA (as the size of the firm changes by a unit, ROA increased by 23.9% as seen in model 3b) given the following result: AdjR2=0.0399; P=0.782. This study concluded that responsibility accounting had an influence on profitability of listed companies in Nigeria. The study recommended that since profitability is the whole essence of responsibility accounting, managers should ensure delegation of task with responsibilities clearly spelt out, regular appraisal process, achievable project budgeting, instituting cross functional teams and efficient reward systems put in place towards achieving the corporate objective that would influence better profitability.
| Published in | International Journal of Accounting, Finance and Risk Management (Volume 5, Issue 2) |
| DOI | 10.11648/j.ijafrm.20200502.15 |
| Page(s) | 101-117 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2024. Published by Science Publishing Group |
Activity Centers, Decentralization, Evaluations, Profitability, Responsibility Accounting
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APA Style
Adegbie Folajimi Festus, Urewa Ochai-Adejoh, Owolabi Babatunde Ayodeji. (2020). Responsibility Accounting and Profitability of Listed Companies in Nigeria. International Journal of Accounting, Finance and Risk Management, 5(2), 101-117. https://doi.org/10.11648/j.ijafrm.20200502.15
ACS Style
Adegbie Folajimi Festus; Urewa Ochai-Adejoh; Owolabi Babatunde Ayodeji. Responsibility Accounting and Profitability of Listed Companies in Nigeria. Int. J. Account. Finance Risk Manag. 2020, 5(2), 101-117. doi: 10.11648/j.ijafrm.20200502.15
AMA Style
Adegbie Folajimi Festus, Urewa Ochai-Adejoh, Owolabi Babatunde Ayodeji. Responsibility Accounting and Profitability of Listed Companies in Nigeria. Int J Account Finance Risk Manag. 2020;5(2):101-117. doi: 10.11648/j.ijafrm.20200502.15
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Download@article{10.11648/j.ijafrm.20200502.15,
author = {Adegbie Folajimi Festus and Urewa Ochai-Adejoh and Owolabi Babatunde Ayodeji},
title = {Responsibility Accounting and Profitability of Listed Companies in Nigeria},
journal = {International Journal of Accounting, Finance and Risk Management},
volume = {5},
number = {2},
pages = {101-117},
doi = {10.11648/j.ijafrm.20200502.15},
url = {https://doi.org/10.11648/j.ijafrm.20200502.15},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20200502.15},
abstract = {Structuring activities into responsibility centers and optimization of resource is a priority in meeting investors’ performance and profitability expectations in both small and large organizations. Studies have shown that to meet these expectations, adequate performance evaluation and reward system are managers’ challenges. This study investigated the effect of responsibility accounting on profitability of listed companies in Nigeria. Ex-post facto research design was adopted. The population was 173 quoted companies on the Nigerian Stock Exchange as at 31st December 2016. Ten companies were selected using stratified and purposive sampling technique. Data were extracted from published financial statements of sampled companies; validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive and inferential (Panel data regression) statistics were used to analyze the data. The study revealed that profitability measured by NPBT, of listed companies in Nigeria is significantly influenced by responsibility accounting (RA), F-Stat=114.56, AdjR2=.0.6964, p=0.000. There is no significant difference in the result of NPBT with and without the control variable of firm size. The result with control variables revealed F-Stat=87.63; AdjR2=0.7242; P=0.000. The study also revealed that RA had a positive significant relationship with EPS with control variables of firm size, F-Stat=6.56, AdjR2=0.1442; P=0.000. However, without control variables, no significant effect of responsibility accounting on EPS was observed as shown in the following result: F-Stat=0.45, AdjR2=-0.0112, p=0.64. Furthermore, the study revealed that profitability measured by ROA exhibited an insignificant relationship with RA given the following results, AdjR2=0.0089; P=0.000. RA with control variables of firm size, insignificantly affected ROA while Firm Size exerted significant positive effect on ROA (as the size of the firm changes by a unit, ROA increased by 23.9% as seen in model 3b) given the following result: AdjR2=0.0399; P=0.782. This study concluded that responsibility accounting had an influence on profitability of listed companies in Nigeria. The study recommended that since profitability is the whole essence of responsibility accounting, managers should ensure delegation of task with responsibilities clearly spelt out, regular appraisal process, achievable project budgeting, instituting cross functional teams and efficient reward systems put in place towards achieving the corporate objective that would influence better profitability.},
year = {2020}
}
TY - JOUR T1 - Responsibility Accounting and Profitability of Listed Companies in Nigeria AU - Adegbie Folajimi Festus AU - Urewa Ochai-Adejoh AU - Owolabi Babatunde Ayodeji Y1 - 2020/05/28 PY - 2020 N1 - https://doi.org/10.11648/j.ijafrm.20200502.15 DO - 10.11648/j.ijafrm.20200502.15 T2 - International Journal of Accounting, Finance and Risk Management JF - International Journal of Accounting, Finance and Risk Management JO - International Journal of Accounting, Finance and Risk Management SP - 101 EP - 117 PB - Science Publishing Group SN - 2578-9376 UR - https://doi.org/10.11648/j.ijafrm.20200502.15 AB - Structuring activities into responsibility centers and optimization of resource is a priority in meeting investors’ performance and profitability expectations in both small and large organizations. Studies have shown that to meet these expectations, adequate performance evaluation and reward system are managers’ challenges. This study investigated the effect of responsibility accounting on profitability of listed companies in Nigeria. Ex-post facto research design was adopted. The population was 173 quoted companies on the Nigerian Stock Exchange as at 31st December 2016. Ten companies were selected using stratified and purposive sampling technique. Data were extracted from published financial statements of sampled companies; validity and reliability of the data were premised on the scrutiny of the external auditors. Descriptive and inferential (Panel data regression) statistics were used to analyze the data. The study revealed that profitability measured by NPBT, of listed companies in Nigeria is significantly influenced by responsibility accounting (RA), F-Stat=114.56, AdjR2=.0.6964, p=0.000. There is no significant difference in the result of NPBT with and without the control variable of firm size. The result with control variables revealed F-Stat=87.63; AdjR2=0.7242; P=0.000. The study also revealed that RA had a positive significant relationship with EPS with control variables of firm size, F-Stat=6.56, AdjR2=0.1442; P=0.000. However, without control variables, no significant effect of responsibility accounting on EPS was observed as shown in the following result: F-Stat=0.45, AdjR2=-0.0112, p=0.64. Furthermore, the study revealed that profitability measured by ROA exhibited an insignificant relationship with RA given the following results, AdjR2=0.0089; P=0.000. RA with control variables of firm size, insignificantly affected ROA while Firm Size exerted significant positive effect on ROA (as the size of the firm changes by a unit, ROA increased by 23.9% as seen in model 3b) given the following result: AdjR2=0.0399; P=0.782. This study concluded that responsibility accounting had an influence on profitability of listed companies in Nigeria. The study recommended that since profitability is the whole essence of responsibility accounting, managers should ensure delegation of task with responsibilities clearly spelt out, regular appraisal process, achievable project budgeting, instituting cross functional teams and efficient reward systems put in place towards achieving the corporate objective that would influence better profitability. VL - 5 IS - 2 ER -
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