International Journal of Financial Management

Adeduro Adesola Ogunmakin ¹, Micah Juwon Akinleye ¹, Oluwafemi Dele Anifowose ¹, Adesodun Isaac Adebayo ¹

Affiliations
1 Department of Accounting, Ekiti State University, Ado Ekiti, Ekiti State, NG

Abstract

The study examined the relationship between tax avoidance and financial performance of selected quoted firms in Nigeria. Secondary method of data collection was adopted. Simple random sampling technique was used in selecting five out of 17 quoted industries in Nigeria and two firms each from the sampled industries Variables tested for tax avoidance are tax cost savings (COS); profit before tax (PBT) and debt equity ratio (DER). Earnings per share (EPS) were proxy for profitability. Data were subjected to pretest analyses including correlation test, panel unit ischolar_main test and panel co-integration test, followed by panel estimation including pooled OLS, fixed effect, random effect estimation, alongside post estimation tests such as restricted f-test, Hausman test, heteroscedasticity test, cross-sectional dependence test, and autocorrelation test. Results showed that profit before tax and debt equity ratio exert a significant positive impact on earnings per share while tax cost savings exert an insignificant negative impact. The study concluded that earning per share is substantial with all the tax avoidance variables showing statistically significant, with the impact of tax cost saving specifically contributing to increase in earnings per share. This study therefore recommends that management should device a model that can help evaluate the appropriate leverage ratio fit for the implementation of tax avoidance strategies to ensure that strategies are adopted without posing threat to the going concern of the firm.

Keywords

Tax Avoidance, Earnings Per Share, Profit Before Tax, Debt Equity Ratio, Tax Cost Savings, Panel Regression.

Full Text

     

Gideon Tayo Akinleye ¹, Adeduro Adesola Ogunmakin ¹, Ibukun-Falayi Owoola Rekiat ¹

Affiliations
1 Department of Accountancy, Federal Polytechnic, Ado-Ekiti, NG

Abstract

To close the gap between supply of and demand for university education, the private sector was licensed to participate with the Federal and State governments in Nigeria. Since owners of universities are generally different from the management, a stewardship-cum-agency relationship arises. This calls for sound internal controls to ensure that the interests of stakeholders are safeguarded. This study examined the differences in types of internal controls in universities in Southwest Nigeria and determined the role of ownership in the observed differences. Two states (Ondo & Ekiti) were initially selected out of six in Southwest Nigeria and three universities were selected from each sampled state: State, Federal, and Private. Primary data was sourced through questionnaires to senior staff of Bursary and Audit units of the sampled universities. ANOVA, Principal Component Analysis (PCA), and F statistics were adopted for data analysis. Significant differences were observed in five internal control features of the universities tested at 0.05 level of significance. Ownership type has a significant effect on: IT adoption (F-value 8.387, p < 0.05); segregation of duties, custody and accounting for fixed assets, smooth flow of operation, and quality of output (F-value 5.334, p < 0.05). It was concluded that ownership types affect how well the universities’ internal controls achieve set objectives. It was recommended that the management in the universities should be aware of the stewardship and agency roles they have to play to their principals, and their commitment to other stakeholders.

Keywords

Internal Control, Internal Check, Ownership Types, Tertiary Institution.

Full Text