اثرات چارچوب نظارتی و فاکتورهای زیست محیطی بر متدهای حسابداری

ABSTRACT Impact of Regulatory Framework and Environmental Factors on Accounting Practices by Firms in Nigeria

Over the years, commentators have been concerned about the need for accounting regulations. As a result, several countries responded to the call by many professionals for the enactment of regulations. Their efforts resulted in the passage of Sarbanes-Oxley Act by the U.S. Congress in July 2002,the European Union Act1606/2002, the Corporate Law Economic Reform Program Act 2004 enacted by Australia in July, 2004 and the replacement of the Nigerian Accounting Standards Board Act 2003 with the Financial Reporting Council Act of 2011. Regulating financial reporting involves not only setting of disclosure and practice requirements but also providing adequate mechanisms to monitor adherence and compliance with disclosure requirements. Baldwin and Cave (1999), argue that regulations are necessary so as to avoid windfall profits, to prevent profit-skimming and to avoid free rider effect. Regulations on financial reporting are very important especially now that the Nigerian Government is calling for foreign direct investment (FDI) in the private sector from international investors and Nigerians in diaspora to invest in the country. Investors and other financial statement users need information to enable them to decide where to invest. Adequate supply of such information made possible by will reduce adverse selection and moral hazard problems so that investors are protected.

Nigerian accounting practices have followed patterns of the British accounting system and the legal regulation of businesses in Nigeria took its roots from the British. In view of the fact that Nigeria was under British rule and influence, the country’s company law has mirrored the company law of the United Kingdom (Okike, 1994). Furthermore, Nigerian system of personal income tax administration follows the British system which was introduced in 1904. Although the personal income tax Act of 1993 is currently in use, most of its provisions were borrowed from the British accounting system. Thus, Nigerian accounting system is similar to other African countries that are within the African Anglo-Saxon bloc, different from Franco-German African countries whose accounting practices are influenced by the ideals of their colonizers.

Consequently, it is worthwhile to examine the institutional framework and environmental factors that affect accounting regulations and compare them with the existing enforcement mechanisms in order to have a better understanding of financial accounting regulations. This study, therefore, is aimed at providing information about the structure and development of Nigeria’s improved financial reporting regulations and disclosure practices, which will assist in boosting international investor’s confidence and hence attract more FDI to the country.