Firm Characteristics and Restatement of Financial Statement in Nigeria
- September 12, 2020
- Posted by: RSIS
- Categories: Accounting, IJRISS
International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue VIII, August 2020 | ISSN 2454–6186
Firm Characteristics and Restatement of Financial Statement in Nigeria
Lodikero Olusola1, Amodu Muhammed Abdulasisi2
1,2Department of Accountancy, Rufus Giwa Polytechnic Owo, Ondo state, Nigeria
Abstract: Published accounting information in financial statements are required to provide various users; shareholders, employees, suppliers, creditors, financial analysts, stockbrokers and government agencies with timely and reliable information useful for making prudent, effective and efficient decisions. This paper examines firm characteristics and restatement of financial reports in Nigeria. Specifically, the study investigates the relationship that subsists between firm characteristics and restatement of financial statement. The corporate annual reports and website for the periods 2010-2019 were utilised as the main sources of secondary data. The study adopted correlation technique to analyse the data collected from annual reports and corporate website of the listed companies in Nigeria. The findings showed that restatement of financial reporting is related to: firm size, ROA, and leverage. The results also revealed that restatement of financial statements significantly influenced investors, potential investors’ behaviour and serves as correcting and control yardsticks to check mate intentional material misstatements in financial records. The study recommended the effective execution of the restatement standard with integrity and independence of executors.
Key Words: Financial Statement; Firm Characteristics; Investors; Financial records; Restatement of financial report.
I. INTRODUCTION
The issue of restatement of financial reports has become a matter of concern globally (…). This concern emerges mainly from the massive financial misstatement of companies’ records. Various steps have been put forward towards correcting this deviation from excessive provision, extraordinary items, off financial position finance, capitalized costs, profit-sharing schemes to personnel, non-trading profit, depreciation rate change, foreign exchange mismatch, low tax charge, and brand accounting, due to the desire for transparent reporting and compliance with regulations. As a result, the public concern for the relationship between firm characteristics and restatement of financial statements has led to the emergence of this paper.
