Corporate Attributes and Creative Accounting of Listed Consumer Firms in Nigeria

Abstract

This study looks into the relationship between corporate characteristics and inventive accounting in
Nigeria’s listed consumer firms. A correlational research design was employed, and the size of the sample consisted
of 20 consumer firms listed on the Nigerian Exchange Group for a period of 10 years (2011–2020), both inclusive. A
regression model was employed as the technique for data analysis. The findings of the study reveal that financial
distress, surplus cash flows, and audit remuneration have a statistically significant effect on the creative accounting
of listed consumer firms in Nigeria, while only gearing ratio was found to have an insignificant effect on the creative
accounting of listed consumer firms in Nigeria. Therefore, it is necessary and desirable for the management of the
listed consumer firms in Nigeria to expand their asset base and increase the scheme of their functions with a view
to having effective and efficient management of their scarce resources (surplus cash flows) while decreasing the
quantum of remunerations paid to auditors, as they have empirically been found to be of strong influence on the
creative accounting of listed consumer firms in Nigeria. The boards of directors of the listed consumer goods firms
in Nigeria, in collaboration with the Securities and Exchange Commission and the Financial Reporting Council of
Nigeria, should come up with a whistleblowing strategy aimed at ensuring strict compliance with the local and
global reporting standards, as this will assist in reducing managerial opportunistic tendencies among the listed
consumer firms in Nigeria.