African Accounting and Finance Journal

Epistemic freedom and situated theoretical perspectives in accounting research in African contexts

Professor Aziza Laguecir — Tue, 01 Oct 2024 00:00:00 +0000

Purpose: This essay advocates for epistemic freedom and the development of situated theoretical perspectives in accounting research relevant to African contexts. The paper underscores the urgent need to move away from the dominance of Global North frameworks, which often impose ethnocentric perspectives on African accounting practices, and foster research grounded in Africa's socio-political, economic, and cultural realities. The essay argues for the critical need for context-specific theorising in African accounting informed by African intellectual traditions.

Methodology: The paper is a reflective essay that intends to decolonise the study of accounting in Africa, allowing for more relevant and diverse insights into the continent's accounting practices and phenomena. It encourages African scholars to embrace their own intellectual heritage and contribute original, contextually grounded theories to the field.

Findings: The essay outlines that despite the increasing attention paid to African contexts, most accounting and finance research on Africa applies Global North theoretical frameworks without considering African countries' specific socio-cultural and political contexts. This results in a limited understanding of Africa’s accounting and finance practices and phenomena. The findings highlight the importance of African scholars taking inspiration from local intellectual traditions, philosophers, and social theorists to develop more relevant theoretical frameworks. The paper suggests drawing upon frameworks from prominent African intellectuals to shape more relevant and contextually grounded research.

Implications (optional): By advocating epistemic freedom, the paper encourages African scholars to rethink and reshape accounting theories to suit their contexts better, resisting the colonial legacy in academic research. The paper finally calls for a decolonial approach to finance and accounting research, urging a shift from the imposition of Global North theories to creating knowledge that reflects Africa’s realities.

Originality: This essay's originality lies in its emphasis on decolonising accounting research by fostering situated theoretical perspectives based on African contexts. It highlights the gap in African accounting research and proposes a movement toward epistemic freedom. Furthermore, it advocates for embracing African philosophical and intellectual contributions, a novel approach that challenges the dominant Global North paradigms in accounting research.

Corporate environmental reporting practices and performance of listed manufacturing companies in Nigeria

Mubaraq Sanni, Muhammed Kamaldeen Usman — Tue, 01 Oct 2024 00:00:00 +0000

Purpose – This study aims to provide empirical insights into the impact of corporate environmental reporting practices on the performance of listed manufacturing companies in Nigeria.

Design/methodology/approach – The study adopts an ex-post facto research design and focuses on a population of seventy-six (76) quoted manufacturing firms, from which a sample of sixty-four (64) companies was selected. Data from fifty-two (52) companies with complete datasets were used to ensure a balanced panel model. Panel Corrected Standard Error Model (PCSE) Regression techniques were applied to analyze data obtained from the annual reports and financial statements of the selected companies over a seven-year period (2016–2022).

Findings – The results indicate that environmental policy disclosure, environmental cost disclosure, and environmental performance disclosure significantly influence the performance of the sampled companies at a 5% level of significance. The findings suggest that effective management and reporting of environmental information can positively impact company performance. Among the disclosure types, environmental performance disclosure has the most substantial effect on company performance.

Research limitations/implications – Corporate environmental disclosure is a crucial predictor of company performance. Regulatory bodies should encourage the integration of environmental reporting in annual reports, ensuring compliance with both mandatory and voluntary requirements. Future research could extend these findings by examining other sectors or geographies to generalize the relationship between environmental disclosures and performance.

Originality/value – This study provides a comprehensive examination of the impact of different types of environmental disclosures on corporate performance. By applying PCSE regression, the study offers a robust analysis of the relationships between environmental disclosure practices and performance outcomes in a developing country context, thereby contributing valuable insights to the existing literature on corporate environmental reporting.

IFRS in Africa: Driving factors and consequences of adoption

Isaac Ruhinda — Tue, 01 Oct 2024 00:00:00 +0000

Purpose: This paper explores accounting practices in Africa by examining the driving factors and stock market consequences of IFRS adoption.

Methodology: Regression analysis was undertaken to identify the role of national governance factors and Foreign Direct Investment on IFRS adoption in Africa, as well as the impact of adoption on the market capitalization of public stock exchanges, considering the different extents of adoption.

Findings: The findings are consistent with a neo-institutionalist framework. Jurisdictions that receive more FDI are more likely to be stronger adopters of IFRS. Jurisdictions with a stronger rule of law are more likely to be strong adopters of IFRS. There is also evidence of IFRS used as a corruption control technique, as more corrupt countries adopt IFRS. IFRS adoption is correlated with increased market capitalisation.

Implications: The findings of this research contribute to the body of research into IFRS convergence. The findings are relevant for policymakers and regulators across Africa.

Originality / Research value: There is limited research into IFRS adoption across Africa, proving this research valuable.

Assessment of budget compliance: Evidence from the Nigerian public sector

Tajudeen Lawal, Adeoye Amuda Afolabi — Tue, 01 Oct 2024 00:00:00 +0000

Purpose: Evidence suggests that the federal government annually budgets and appropriates amounts for both capital and recurrent expenditure to various ministries, departments, and agencies, yet there is no impact on the ordinary citizen on the street. The question is whether it is a result of non-compliance with budgets or other factors hindering budget compliance. In addition, the federal government introduced different policies to fast-track the process of budgeting and public expenditure; several factors have prolonged the period of the current economic recession. From the fiscal policy side, delays in budget approval and implementation are major challenges. Against this background, this study examines factors that influence budget compliance and in relationship with variance in Nigeria.

Methodology: The data was gathered from secondary sources and analysed using the Engle-Granger co-integration test and the augmented Dickey-Fuller (ADF) test (Units root test).

Findings: The findings revealed that corruption, political stability, and type of government have a significant negative relationship with variance. Additionally, corruption and crude oil prices show a negative effect on actual total expenditure. However, Gross Domestic Product (GDP) and revenue are positively significant with budget variance and actual total expenditure.

Limitations/Implications: This study illustrates evidence relevance to the public and academic debates about how government should use all the institutions at their disposal to minimise corruption since corruption reduces the variance and actual total expenditure. In addition, since crude oil price hinder government expenditure, the federal government should focus more on other source of revenue for budget apart from crude oil.

Originality: This study provides the effect of corruption, crude oil price, political stability and the type of government, as indicators for budget compliance on the variance and total actual expenditure. As a result, this study contributes to the literature in the area of budgeting system for the public sector in developing countries with specific focus on Nigeria.