Open Access Original Research Article

Financial Disclosures X-ray and Predictions: Professional Appropriateness to Creative Accounting Practices in Nigeria

Ugochukwu J. Nwoye, Chukwunonso Ekesiobi, Mary-Fidelis Chidoziem Abiahu

Asian Journal of Economics, Business and Accounting, Page 1-14
DOI: 10.9734/AJEBA/2017/35679

This research work focuses on the role played by predictive ratios in effort to check incidence of creative accounting in the financial reporting system of Dangote Cement Nigeria Plc. It examines whether the impact of joint application of the Beneish 8-Predictive Ratios and the Altman Z-Scores as effective check on practices of Creative Accounting in Dangote Cement Nigeria Plc differ significantly. It also makes further effort at determining whether the predictive implications/outcome of the Beneish 8-Predictive Ratios application differ significantly in the pre and post IFRS reporting periods covered in the study. The research work is quantitatively designed. Dangote Cement Plc, the only Nigerian manufacturing company that made the list of Forbes 2015 top 2000 companies in the world, is purposively and judgmentally sampled. Thus, data from secondary sources comprising Annual Reports and Audited Accounts of Dangote Cement Nigeria Plc (2000 – 2015), published journals, Articles, Inaugural lectures etc, are used for the successful completion of this work. Inputs from the Annual Reports and Accounts are further analysed with the aid of Beneish 8-predictive Ratios and Altman Z-Scores ratio using the Mann Whitney U Test, and Wilcoxon statistical techniques. The result of the analyses shows that there is no significant difference in the impact the joint application of Beneish 8-predictive Ratios and the Altman Z-score model would have on investigations into creative accounting practices in predicting possible tendencies of such practices in any corporate organisation in Nigeria. It also found that there is no significant difference in the predictive implications of the Beneish 8-Predictive Ratios in the pre and post IFRS reporting periods of Dangote Cement Company. As a result, the study recommends that professional Accountants must tighten up their audit belt firmly towards ensuring that greater emphasis is equally placed on the data integrity/quality of the financial reports and not just on their IFRS disclosure quality.

Open Access Original Research Article

Small Firms’ Strategy Adoption and Business Outcomes in Business Games: An Empirical Investigation from Nigeria

Elijah E. Ogbadu, Danlami Joseph Aduku, Akeem Tunde Nafiu

Asian Journal of Economics, Business and Accounting, Page 1-13
DOI: 10.9734/AJEBA/2017/34233

The study aimed at determining the effect of adopted competitive strategy on the outcomes of SMEs in Nigeria. The sample size of the study comprised of 1231 owner-managers from selected Small and Medium scale Enterprises within four sectors in Nigeria. The instrument used was structured questionnaire. Strategies adopted by SMEs are superior design, high quality, low prices and new product introduction among others. The study measured SMEs’ outcomes with product/service profitability, market share and customer satisfaction. Data obtained were analyzed using descriptive statistics and multiple regressions model. Findings showed that superior design strategy has negative effect on market share of SMEs; high quality strategy has positive effect on market share and negative effect on customer satisfaction; low prices strategy has positive effect on market share; and new product introduction strategy has positive effect on product/service profitability and customer satisfaction. The study concludes that in the pursuit of the desired SMEs’ outcome, owner-managers need not to be traditional about strategy adoption. It was recommended that SME owner-managers adopt low price strategy and new product introduction strategy in the Nigerian market.

Open Access Original Research Article

Determinants and Transmission Channel of External Debt: Evidence from Malaysia

Enobong Udoh, Rabiatul Adawiyah Mohamed Rafik

Asian Journal of Economics, Business and Accounting, Page 1-10
DOI: 10.9734/AJEBA/2017/35031

Malaysia’s external debt has been on an increase, which has become a national concern. Data used for this study was from 1970 to 2013. The VECM results showed that external debt had no transitory but a permanent relationship with the determinant variables. Exchange rate, recurrent and capital expenditures all posted a positive longrun relationship while GDP had a negative relationship with external debt. Granger causality test was conducted to determine the direction of causation between the variables. The results indicate that only capital expenditure had a unidirectional causality effect on external debt and the transmission channel showed that GDP impacts external debt through its impact on capital expenditure. This validates the claim that in the longrun Malaysia has been able to tie its external debts to capital projects which is desirable.

Open Access Original Research Article

Does Energy Consumption Boost Economic Growth in Bangladesh: Evidence from ARDL Bounds Testing Approach

Mir Khaled Iqbal Chowdhury, Md. Abu Hasan, Md. Abdul Wadud

Asian Journal of Economics, Business and Accounting, Page 1-9
DOI: 10.9734/AJEBA/2017/34156

The paper assesses whether energy consumption leads to economic growth in Bangladesh applying the ARDL (autoregressive distributed lag) bounds testing approach of cointegration. We use time series data for the period from 1979 to 2014. Results report that energy use and economic growth cause each other to boost both in the short- and long-run. Policy implication is that the government needs to continue generating and ensuring supplying of energy to boost both economic growth and energy generation to achieve the ‘Vision 2041’ of developed country.

Open Access Original Research Article

Money Demand and Supply under Market Disequilibrium: Evidence from Nigeria

Enobong Udoh

Asian Journal of Economics, Business and Accounting, Page 1-7
DOI: 10.9734/AJEBA/2017/35169

This paper argues that for economies that have structural rigidities and irregularities, the received knowledge of equilibrium in the demand and supply of money should be interrogated. The paper proposes a third variable – equilibrium bias – to test its significance. Using quarterly time series data for Nigeria from 2008Q1-2016Q2, a money demand function was estimated with the aid of Ordinary Least Square Method in a coefficients and standard errors bootstrap approach. The result found that due to structural rigidities and irregularities in the economy, the variable income though significant posted result against a priori expectation and the equilibrium bias variable was significant which justifies its use.