Effect of Environmental Accounting on Profitability of Listed Oil and Gas Firms in Nigeria
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EFFECT OF ENVIRONMENTAL ACCOUNTING ON PROFITABILITY OF LISTED OIL AND GAS FIRMS IN NIGERIA
- Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Nigeria (email@example.com)
2 Department of Accountancy, Nnamdi Azikiwe University Awka, Anambra State, Nigeria (firstname.lastname@example.org)
The objective of this study was to ascertain the effect of environmental accounting on profitability of oil and gas firms listed on Nigeria Stock Exchange between 2011 and 2021. Eleven (11) listed oil and gas firms were purposively sampled. The proxies for environmental accounting include waste management cost, community development cost, employee health and safety cost and environmental remediation cost, while net profit margin was employed as profitability measure. Pearson Correlation Coefficient and Panel Least Square (PLS) Regression analysis via STATA 13 statistical software were used to test the hypotheses of the study. The result of this study showed that waste management cost, community development cost, employee health and safety cost and environmental remediation cost have a significant positive effect on net profit margin at 5% level of significance respectively. This study therefore recommends inter alia that since environmental remediation cost is value relevant in making strategic business decision, Thus, oil and gas firms should constantly reposition their accounting system in order to provide information on environmental remediation so that the true costs in an organization can be ascertained and properly allocated.
Keywords: Waste Management Cost, Community Development Cost, Employee Health and Safety Cost, Environmental Remediation Cost, Net Profit Margin.