Gusau Journal of Accounting and Finance <p><strong>Gusau Journal of Accounting and Finance (GuJAF)</strong> is a response for a timely call with a view to filling a significant research vacuum and to provide an academic platform for researchers, academics, practitioners, policy makers, Students as well as other interested parties to evaluate, share, and disseminate knowledge, professionalism, skills and experiences on areas especially contemporary issues in the field of Accounting and Finance. The Journal is the first of its kind in the Department and is expected to provide and expand the existing body of knowledge in the area of Accounting and Finance research. GUJAF is an academic, double blind peer reviewed published by the Department of Accounting and Finance, Federal University Gusau, Zamfara State Nigeria. The journal is to be published in two issues of April and October annually.</p> Federal University Gusau en-US Gusau Journal of Accounting and Finance 2756-665X TAXATION AND SOCIAL SERVICES: EVIDENCE FROM NIGERIA <p>This study econometrically examined taxation effect on social services in which how taxation incomes finance education services were investigated. Data were collected from FIRS bulletin and CBN statistical bulletin covering 1981 to 2020. To realize econometric impact of taxation on social services, regression model, Cointegration, VECM and granger causality wald test were analytically engaged. Petroleum profit tax, company income tax, Value added tax and Custom and Excise Duties have positive significant impact on Social services both in the short run and in the long run in Nigeria. It is concluded that taxation positively ignited education services and vice versa. This displayed bidirectional causality amid taxation and social services. Also taxation has positive significant impact on education services both in the short and long run in Nigeria. The huge revenue earned by the government through taxation assisted government to improve her education and EDUT services. It is recommended that administration of taxes especially company income tax and customs and excise duties should be done in a way that collection and remittance cannot be evaded so that its effectiveness will be properly comprehended in the magnitude of social services provision.</p> ADEGBITE ABDUSSAMAD Olarinde ARIYO-EDU AMINAT ARIKE Copyright (c) 2022 2022-06-15 2022-06-15 3 1 21 21 CAPITAL STRUCTURE AND PROFITABILITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA <p>Bank management and providers of funds are of the view that capital structure is of supreme importance, the use of a wrong mix of capital structure could seriously affect the performance and subsistence of such a bank. Consequently, this research examines the impact of capital structure on the net interest margin of deposit money banks in Nigeria. Panel data analysis was employed, analysing the fixed effect and random effect models. The population of the study is 14 listed banks at the NSE. The sample is the six systemically important banks in Nigeria and covered the period of 2012 to 2020. Findings shows that Long Term Debt to Total Asset and Total Debt to Total Asset are statistically significant determinants of the net interest margin in Nigerian deposit money banks while Total Equity to Total Asset, Total Asset, Risk and Income Tax Expenses to Earnings before Taxes are not statistically significant determinant deposit money banks’ net interest margin in Nigeria. Therefore, it is concluded that the net interest margin of deposit money banks in Nigeria is statistically significantly determined by long term debt and equity. As such, the study recommended that deposit money banks in Nigeria should take into cognizance, the leverage level incurred in the capital structure as it significantly determines bank’s net interest margin.</p> Ibrahim Kamaldeen Ibraheem Nageri Abdullai Agbaje Salami Copyright (c) 2022 2022-06-15 2022-06-15 3 1 18 18 CREDIT APPRAISAL, COLLECTION POLICY AND LOAN PERFORMANCE OF MICROFINANCE BANKS IN KWARA STATE, NIGERIA <p>The arrival of microfinance banks as another channel to mainstream the provision of financial services has become a major succour. Yet, the banks encountered high risk of default which is not unconnected with the peculiarities in its lending policies. In view of this, the study examines the effect of credit appraisal policy and credit collection policy on loan performance of MFBs in Kwara State, Nigeria. The study employed survey research design and the population consists of bank managerial and senior staffers from which one hundred and forty (140) were drawn conveniently as sample Data obtained through questionnaire were analyzed using descriptive and inferential statistics. The hypotheses for the study were tested using ordered logistic regression with average partial effects. The study found that collection policy significantly affects the loan performance of MFBs while credit appraisal policy does not significantly affect their loan performance as evidenced by their p-values. The study therefore concluded that collection policy influence loan performance of MFBs in Kwara State. Therefore, the study recommends that the credit appraisal policies should be restructure to capture the relevant information which will help these banks to determine the default intent of customers. Also, further monitoring mechanism should be put in place for bank loan collection policy in order that its effectiveness in increasing loan performance is improved.</p> Lukman A. O. Abdulrauf Abdul Olalekan Hassan Copyright (c) 2022 2022-04-21 2022-04-21 3 1 21 21 DETERMINANTS OF AUDIT FEES OF LISTED INSURANCE COMPANIES IN NIGERIA <p>Controversies had risen among investors and other stakeholders of corporations why external auditors receive a substantial amount as remuneration of the audit and non-audit services rendered to their clients. These fees had been charged to add trustworthiness to the financial reports prepared by the management and also to protect the interest of the shareholders. A lot of problems occurred on what are such factors that determine (increases or decreases) the audit fees charged by external auditors. This study is aimed at examining the factors that determined audit fees of listed insurance companies in Nigeria using a correlational research design. The study’s population comprised of twenty-six (26) listed insurance companies in Nigeria. Panel data were generated from the annual report and accounts of the sampled insurance companies for the periods 2011-2020 arrived at using a judgmental sampling technique. The study used random effect Generalized Least Square (GLS) regression for data analysis. The study revealed that client size and audit firm size are the important factors determining audit fees of listed insurance companies in Nigeria. While client profitability, client complexity, client underwriting risk, and client liquidity risk are found to have an insignificant and negative effect on audit fees of listed insurance companies in Nigeria. The study, therefore, recommended that auditors of Nigerian insurance companies should inspire their clients in increasing their total assets including their investments which increases the size of their businesses. This increases the companies’ financial performances, as well as, the professional fees collected by auditors of insurance companies in Nigeria.</p> Sagir Lawal Mohammed Ibrahim Copyright (c) 2022 2022-04-21 2022-04-21 3 1 22 22 EFFECT OF CEO PAY AND CEO POWER ON RISK-TAKING OF LISTED DEPOSIT MONEY BANKS IN NIGERIA <p>It has been argued that increasing demand for high compensation by executives and powers in the hand of executives have contributed to increased risk-taking in the banking industry. The study aims to examine the effect of CEO Pay, CEO Ownership Power, and Expert Power on risk-taking of listed deposit money banks in Nigeria. A sample of 12 deposit money banks for the period 2009 – 2019 was studied and analysed using panel regression. The study found that CEO pay and CEO Expert power have no significant effect on risk-taking of listed deposit money banks in Nigeria. In contrast, CEO Ownership power was found to influence risk-taking significantly. The study recommends strengthening the influence of independent directors on the board to mitigate the influence of powerful CEOs.</p> Ismaila Yusuf Salisu Abubakar Idris Ahmed Aliyu Charles Dikki Aneitie Copyright (c) 2022 Author 2022-04-21 2022-04-21 3 1 21 21 EFFECT OF FINANCIAL LEVERAGE ON STOCK RETURNS OF LISTED COMPANIES IN NIGERIA CAPITAL MARKET <p>This study investigated the effect of financial leverage on stock returns of listed companies in Nigeria. The study population is listed companies in Nigeria capital market. The adjusted population is 103 companies. Monthly share prices and financial leverage from 2010 to 2018 were extracted from Bloomberg. Data were transformed to single period averages, and cross sectional regression and Z-test analysis were conducted. The outcome from the regression and z-test revealed that financial leverage has no significant relationship with stock returns. The outcome was consistent with Modiglianni and Miller theory. It was recommended that companies focus on investment strategies as opposed to financing strategies.</p> Abdulrahman Abubakar Ahmad Bello S. A. Abdullahi M. D. Tahir Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 22 22 EFFICIENCY OF DEPOSIT MONEY BANKS IN NIGERIA: DATA ENVELOPMENT ANALYSIS APPROACH <p>In today’s turbulent and competitive operating environment, the survival of banks depends on the efficient use of scarce resources. This study examines the efficiency of ten (10) selected banks in Nigeria for the period of five (5) years (2016 to 2020). The efficiency measures of constant return to scale (CRS), variable return to scale (VRS) and return to scale (RTS) were employed using the Data Envelopment Analysis (DEA) approach. The findings from empirical analysis show that only five banks, Guarantee Trust Bank (GTB), First City Monument Bank (FCMB,) Access bank, Union bank and Sterling bank were significantly efficient in Nigeria with respect to CRS and VRS for the period considered. However, all the banks were significantly efficient in the long run with respect to RTS. Therefore, the study recommends that the less efficient banks should study and understand the strategies adopted by the efficient banks. The study also recommends that investors/shareholders should invest more on the efficient banks such as GTB, FCMB, Access bank, Union bank and Sterling bank. Again, the study recommends that the inefficient banks like ZENITH, FIRST BANK, UBA and WEMA should be encouraged to focus more on long term project and explore ways to be more operationally efficient and move towards innovation. Regulatory authorities should ensure strict compliance to resources management policies.</p> Mayowa Gabriel AJAO Lucky Charity OMOREGIE Copyright (c) 2022 2022-04-21 2022-04-21 3 1 22 22 FINANCIAL PERFORMANCE OF BANKS IN SELECTED AFRICAN COUNTRIES: DOES INSTITUTIONAL QUALITY MATTER? <p>The importance of the banking sector to any nation's development cannot be overemphasized due to its ability to provide the loanable funds required for investment and capital formation. However, the decline in the financial performance of banks in Africa coupled with weak institutions prevalent in most countries in Africa have limited the banks' capacity to effectively stimulate economic prosperity. Hence, this study examined the effect of institutional quality on the financial performance of banks in selected African countries. The study population consisted of the 1017 banks operating in Africa from 2010 to 2020. Yamane formula and random cluster sampling was employed to select the top 200 banks in terms of assets, profits and size in Africa as at 2020. The study employed secondary data obtained from the Bank Focus database and the World Development Indicator. System Generalized Method of Moment was employed as the estimation technique. Findings revealed that institutional quality positively and significantly affects bank financial performance in selected African countries. Consequently, this study concluded that institutional quality is an important driver of bank financial performance. Thus, this study recommended that the selected countries' governments promote policies that would strengthen their nation's institutions because of their ability to further improve banks' financial performance.</p> Toluwa Celestine Oladele Peters Ade Sanni Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 20 20 FIRM-SPECIFIC CHARACTERISTCS AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA <p>The contribution of listed agricultural firms to market development and economic growth has been consistently low in recent years. This could be traced partly to low profitability of agricultural firms in the country which is a function of several firm-specific factors. The study therefore examined the firm-specific factors that influence financial performance of listed agricultural firms in Nigeria. Data were collected from annual reports of the five (5) listed firms in the sector for eleven years from 2010 to 2020. The data were analysed with static panel data regression approach. The results indicate that asset maturity, dividend payout and liquidity have positive and significant effects on return on asset while firm size has significantly negative effect on the return on asset of the firms at 5% level of significance. The study concluded that that the listed agricultural firms utilised their assets and manage their liquidity efficiently. There is however, some scale inefficiencies in the firms because, the finding of negative relationship between firm size and return on asset indicates that larger the companies become the lower the financial performance. It is therefore recommended that the managements of agricultural companies in Nigeria should ensure that the firms are not overcapitalised in terms of investment in assets in order to boost both the scale efficiency and profitability of the firms.</p> Abdulrazaq T. Jimoh John A. Attah Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 21 21 MEDIATING EFFECT OF AUDIT COMMITTEE ON BOARD DYNAMIC AND CREATIVE ACCOUNTING IN NIGERIAN FIRMS <p>Several studies were conducted on corporate board dynamic and creative accounting and their findings were mixed. None to the researcher’s knowledge studied the mediating effect of audit committee on such relationship in an entire population of the listed non-financial companies in Nigeria for a period of 10 years (2011-2020). Secondary data was extracted from the annual reports and accounts, companies’ and directors’ profile of the firms. The data was analysed using structural equation model/partial least square regression. The study found among other things that corporate board dynamic and its proxies except board capability have significant impact on the creative accounting of listed firms in Nigeria. Moreover, audit committee has a mediating effect on the relationship between board gender diversity, board ethnicity, board reputation, board nationality, board risk and creative accounting of the firms. The audit committee has no mediating effect on the relationship between board capability and creative accounting. It is therefore, recommended that, the listed companies in Nigeria should ensure the constitution of sound and robust audit committees. They should also ensure the presence of diverse gender, diverse ethnic groups, directors with national honour and foreign directors on the boards. The firms should ensure the establishment of risk management committee in all the firms. They should ensure the presence of highly skilled, experienced, and knowledgeable directors on the boards as these will help in mitigating the creative accounting with the support of audit committee. The implication of the results of this study to literature is that the findings of the study are to be used by researchers in validating tokenism/critical mass theory, social capital theory. Also, to validate upper echelon theory, efficient contracting theory, resource dependency theory, signalling theory, human capital theory, behavioural theory of corporate boards and governance and agency theory.</p> Abbas Usman Hassan Shehu Usman Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 29 29 NEXUS BETWEEN TAXATION AND FOREIGN DIRECT INVESTMENT IN NIGERIA <p>This paper explored taxation and foreign direct investment (FDI) using the case of Nigeria with limited investigation. Taxation was proxy by company income tax (CITX) and value added tax (VATX), while FDI was proxy by FDI inflows. Data employed for the analyses were from 2000 to 2020 and obtained from Central Bank of Nigeria (CBN) Statistical Bulletins as well as World Development Indicators (WDI). Using time series econometric technique, the results revealed that CITX has a negative significant impact on FDI. Specifically, this implies that a rise in CITX rate leads to a decline in FDI inflow in Nigeria. We also find that value added tax (VATX) significantly improves FD investment in Nigeria. From the findings, it is recommended that policy makers in the area of corporate tax laws should enact laws that offer incentives to attract FDIs. More than this, government could technically rise the value added tax rate and spend the additional fund from it on human capital training and development for human effectiveness in companies.</p> Daniel Ayegbeni Ulokoaga Esther Ikavbo Evbayiro-Osagie Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 20 20 OWNERSHIP STRUCTURE AND FINANCIAL PERFORMANCE OF QUOTED MORTGAGE BANKS IN NIGERIA <p>The financial performance of mortgage banks worldwide has been a significant source of worry among researchers, professionals, and other stakeholders because of the substantial role mortgage banks play in people’s well-being and economic activity. Despite mortgage bank reforms, the mortgage banking systems in Nigeria are still developing. They remain at a low level of financial performance, poor financing management, and decline in economic performance indicators due to poor ownership structure among mortgage banks in Nigeria. This study examines the effects of ownership structure (significant shareholding, government holding, and minority holding) on financial performance indicators (earnings per share, net profit margin and bank size via total assets) of Nigerian mortgage banks. Ex-post facto research design was employed as well as the panel regression method of analysis, and data was sourced from selected mortgage banks in Nigeria from 2011 to 2020. The study found that ownership structure components (significant shareholding, government holding, and minority holding) have positive and significant effect on financial performance indicators of selected mortgage banks in Nigeria at less than a p&lt;0.05 level of significance. The study concluded that ownership structure components affect financial performance indicators of selected mortgage banks in Nigeria. Therefore, the study recommended that there is a need for mortgage banks in Nigeria to increase their ownership structure in terms of significant shareholding, government holding, and minority holding), as it was found that ownership structure absolutely affects the financial performance indicators of mortgage banks quoted in Nigeria.</p> Awotundun, D. A. Jinadu, M. Y. B. Fakunmoju, S. K. Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 21 21 VALUE RELEVANCE OF EARNINGS AND BOOK VALUE: A COMPARATIVE ANALYSIS BETWEEN BIG4 AND NON-BIG4 AUDITED LISTED FIRMS IN NIGERIA <p>This study empirically examined the comparative value relevance of earnings and book value between big4 and non-big4 audited listed firms in Nigeria. The study covered 161 listed firms for the period 2014 -2019. However, an adjusted population of 154 firms was used with aid of a filter. The study employed quantitative data extracted from the annual reports of the sampled firms and the study aligns itself to positivist paradigm. Data were analyzed based on multiple regression technique with the aid of STATA, and the study revealed that both EPS and BVP are value relevant in both models. However, EPS and BVP in the first model are more value relevant. On the whole, the study found that accounting information of firms audited by Non-Big4 audit firms is more value relevant than that audited by Big4 audit firm. Thus, the study recommends inter-alia that regulatory authorities such as CBN and SEC should ensure that firms engage the service of audit firms not necessarily the Big4 audit firms as this helps improve the credibility of the report.</p> Abdu Abubakar Ishaya Luka Chechet Muazu Saidu Badara Yunusa Nasiru Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 19 19 VALUE RELEVANCE OF INTERNATIONAL FINANCIAL REPORTING STANDARD FOUR OF LISTED NIGERIAN INSURANCE FIRMS <p>There is growing concern among regulators and investors over the depreciation in the value of listed insurance firms in Nigeria. The study examines the value relevance of the information content of IFRS 4: Insurance Contracts disclosure of listed insurance firms in Nigeria for the period 2012 to 2020. It further compares value relevance of accounting numbers, with high IFRS 4 disclosures and those with lower disclosures. The study adopted correlational research design. The population for the study consisted of all the 26 insurance firms listed on the Nigerian Stock Exchange as at 31st December 2020, with a sample size of 15 firms. The Ohlson Price Model was adopted for the study. Using robust ordinary least square regression, the study found IFRS 4 disclosures to be value relevant. Also, EPS of Insurance firms with high compliance with IFRS 4 is not more value relevant than that of firms with low compliance with IFRS 4, BVPS of Insurance firms with high compliance with IFRS 4 is more value relevant than that of firms with low compliance with IFRS 4. Overall, findings from the study strengthen the position that IFRS improves the quality of accounting information in annual reports. Furthermore, the study recommends among others that management of insurance firms should work towards improved compliance with IFRS 4 as this would boost investor confidence thereby improving their performance in the stock market.</p> Mariya Mohammed Hafiz Muhammad Mustapha Bagudo Salisu Abubakar Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 23 23 WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF LISTED CONSUMER AND INDUSTRIAL GOODS COMPANIES IN NIGERIA <p>Many businesses find it difficult to productively organize their working capital and this causes more trouble than expected because, without it, it is oftentimes difficult to successfully run these businesses and expect profitability, stability, and continuity. This study, therefore, considers the effect of Working Capital Management on the Profitability of Listed Consumer and Industrial Goods Companies in Nigeria. Data from the financial statements of the companies under investigation were used in the research. Generalized Least Square regression, variance inflation factor, multicollinearity, heteroskedasticity, and the Hausman specification test were used to analyze the data. It reveals that the inventory conversion time and working capital to revenue ratio have a significant outturn on their profit, however, the cash conversion period and current ratio have no impact on the profitability of listed consumer and industrial products companies in Nigeria, according to this study. It recommends that managers of consumer and industrial goods companies should adopt positive working capital policies and strategies aimed at enhancing the working capital structure by ensuring that the inventory conversion period is reduced to be the barest minimum for possible upward review of profitability. Thus, management must prioritize working capital management as it is currently viewed as a source of concern for many organizations.</p> Kwasau Ntyak Leah Eniola Agbi Samuel Lateef Olumide Mustapha Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 20 20 AUDIT QUALITY, TENURE AND REAL EARNINGS MANAGEMENT OF LISTED NONFINANCIAL FIRMS IN NIGERIA <p>Earnings management is volatile due to its asymmetric nature by managers of non-financial firms. Yet, very few studies have examined the issues that cause this manipulation, especially in non-financial firms. This study, therefore, examines the relationship between audit big4 and audit tenure on REM of 76 listed non-financial firms in Nigeria using a 10-year data set <br>(2010-2019). The MachammeRatios Database is used for data extraction. The results indicate that audit big4 shows significant positive effects on real earnings management. However, audit tenure shows in significant adverse effects on real earnings management. The paper, therefore, concludes that Audit Big4 is very important in mitigating real earnings management in the non-financial companies in Nigeria. The empirical findings are essential for non-financial firms' policy enhancement and further research and contributions to the body of knowledge. Managers should improve audit tenure while enhancing audit big4 <br>independent to reduce incidence earnings management.</p> Ahmed Mohammed Ademu Yahaya Musa Zakariya Copyright (c) 2022 Author(s) 2022-04-21 2022-04-21 3 1 18 18