Quantitative Accounting Information and Financial Performance: The Policy Implication of Nigerian Insurance Firms

QUANTITATIVE ACCOUNTING INFORMATION AND FINANCIAL PERFORMANCE: THE POLICY IMPLICATION OF NIGERIAN INSURANCE FIRMS

SYDER, Inuadume Daniel (Ph.D), ACA.

Department of Accounting, Faculty of Management Sciences, University of Port Harcourt.

Email: inuadume.syder@uniport.edu.ng

BELLO, Bilikis Modupeola (Ph.D)

Department of Accounting, Faculty of Management Sciences, University of Port Harcourt.

E-mail: bilikismbello@gmail.com

ABSTRACT

The resounding reporting issues among corporate entities on earnings management and income smoothing with its information asymmetry phenomenon had prefigured cases of huge financial scandals which had reduced market confidence in some annual financial reports. Such circumstances engulfed entities like Worldcom, Enron, Cadbury Plc et cetera. The Nigerian insurance industry that primarily accepts the transfer of other business risks and uncertainty is not exceptional in the experience, jostled by this background; the study aimed to examine the effect of quantitative accounting information on the financial performance of Nigerian insurance firms. Ex-post facto design was employed to allow the analysis of past economic events to explain the behaviour of the variables. Secondary data were obtained from the websites of the selected listed insurance firms on Nigeria Stock Exchange from 2005 – 2019. A panel OLS regression with a specified model was done to ascertain the comparative outcome of pool and fixed effect in the behaviour of the variables. The findings indicated that the disclosure of items of both income statements and statement of financial position stimulated a positive and significant effect on the return on assets of the Nigerian insurance firms. It was therefore concluded and recommended that despite the objectives of earnings management and income smoothing among management alternates, the reliable quantitative accounting information should be disclosed to the users of information because it would propel the predetermined financial performance by sustaining investment and policy customers to the firms.

Keyword: Quantitative, insurance, financial performance, accounting information.


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