Accounting Conservatism and Performance of Nigerian Consumer Goods Firms’: An Examination of the Role of Accruals

David Okelue Ugwunta, Boniface Uche Ugwuanyi


In this study the evidence over the existence and magnitude of the assumed negative relation between accounting conservatism and firm performance in Nigeria was examined. Data from the annual financial statements of firms under the Consumer Goods sectoral classification on the Nigerian Stock exchange was used. The hypotheses were tested using the panel least squares while assuming the fixed effects. Opposed to the assumed negative relation, findings from the study suggest that accounting conservatism has a positive but non-significant effect on firm performance. This implies that firms in the Nigerian Consumer Goods sector do not practice accounting conservatism and hence produce low financial reporting quality. This is given the absence of accruals quality achieved when the reported information reported is credible and free of error and bias, intentional or otherwise. The study recommends that firms in Nigeria should be penalised if reported information are found to incomplete and opaque not free of error and bias.

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International Journal of Financial Research
ISSN 1923-4023(Print)ISSN 1923-4031(Online)


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