ENVIRONMENTAL ACCOUNTING AND CORPORATE FINANCIAL PERFORMANCE: A CASE STUDY OF THE NIGERIAN MANUFACTURING INDUSTRY (CONSUMER GOODS).

ABSTRACT

The increasing concern about environmental degradation, resources depletion, resources scarcity, environmental degradation and the sustainability of economic activity have made the development of Environmental accounting an area of interest. Adequate research is not carried out to effectively determine what environmental accounting is truly about and whether or not it has an impact on the corporate performance of quoted manufacturing firms. The study evaluated the effect of environmental accounting on profitability of quoted companies in the Nigerian Manufacturing Sector.

The study employed the ex post facto research design. The population of the study consisted of the quoted manufacturing companies in Nigeria made up of 71 companies as at 31st December, 2017 according to Nigeria Stock Exchange (NSE) which formed the entire population of the study. The study employed the convenience sampling in selection of the sampled companies. Data from the research were obtained from the annual reports of the sampled companies. The study adopted descriptive and inferential statistics.

The results showed that environmental cost had no significant relationship on return on assets with p-value (0.9615 < 0.05), the controlling effect of firm size and age in relation to environmental cost has a significant effect on return on assets with p-value (0.100274 > 0.05), environmental cost had no significant relationship on return on equity with p-value (0.4721 < 0.05) and the controlling effect of firm size and age in relation to environmental cost has a significant effect on return on equity with p-value (0.032359 < 0.05). 

The study concluded that environmental accounting had no significant effect on profitability of quoted companies in the Nigerian Manufacturing Sector while the controlling effect of firm size and age in relation to environmental cost has a significant effect on profitability of quoted companies in the Nigerian Manufacturing Sector with an exception of return on assets. The study recommended that management should ensure that investors make investment in the company and the companies should not only look at environmental accounting as an expense but as an investment.

Word Count: 330

Keywords: Environmental cost, Environmental accounting, Firm age, Firm size, Profitability, Return on assets and Return on equity.

TABLE OF CONTENTS
Title Page                                                                  iDeclaration                                                                                                                               iiCertification                                                                                                                        iiiDedication                                                                                                                        ivAcknowledgement                                                                                                        vAbstract                                                                                                                            viTable of Contents                                                                                                             viiList of Tables                                                                                                                  viii
CHAPTER ONE: INTRODUCTION:Background to the Study1 Statement of the Problem4Objectives of the Study7 Research Questions7Research Hypotheses 7Significance of the Study8Scope of the Study9Operationalization of Variables10Operational Definition of Key Terms11
CHAPTER TWO: LITERATURE REVIEW2.1. Conceptual Review132.1.1. Environmental Accounting132.1.2. Forms of Environmental Accounting152.1.3. Scope of Environmental Accounting152.1.4. Objectives of Environmental Accounting 162.1.4.1 Reasons for the development of Environmental Accounting162.1.5. Accounting Interest in the Environment.162.1.6. Limitations of Environmental Accounting182.1.7. Reasons Why Companies should report Environmental Activities in Nigeria182.1.8. Environmental Accounting Approaches192.1.8.1. Environmental Costs192.1.9. ISO 14000 202.2. Financial Performance 212.2.1. Measurement of Financial Performance222.2.2. Relationship between Environmental Accounting and Firm Profitability232.2.3. Other Determinants of Environmental Reporting in Nigeria242.4. Theoretical Review262.4.1. Stakeholder Theory262.4.2. Legitimacy Theory 282.4.3. Positive Accounting Theory 292.4.4. Institutional Theory292.4.5. Accountability Theory                                                                                                312.4.6. Theoretical Framework                                                                         32         2.5. Empirical Review322.6. Gaps in the Literature.532.7. Researcher’s Conceptual Framework54
CHAPTER THREE: RESEARCH METHODOLOGY 3.1. Research Design553.2. Population of the Study553.3. Sample size and Sampling Technique553.4. Method of Data Collection563.4.1 Research Instrument563.4.2. Validity of Research Instrument563.5. Method of Data Analysis573.6. Model Specification and Measurement of Variables573.7. Model Evaluation and Test of Significance593.8. Apriori Expectation593.9. Ethical Consideration59
CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION OF FINDINGS4.1. Descriptive Statistics and Pre-Estimation Test614.1.1. Descriptive Statistics614.1.2. Pre-Estimation Test644.1.2.1. Unit-root test644.2. Testing of Hypotheses and Analysis654.2.1. Testing of Hypothesis One654.2.2. Testing of Hypothesis Two674.2.3. Testing of Hypothesis Three694.2.4. Testing of Hypothesis Four724.3. Discussion of Findings74
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS5.1. Summary of the whole study775.2. Summary of Findings785.2.1. Theoretical Findings785.2.2. Empirical Findings785.3. Conclusion805.4. Recommendations805.5. Contribution to Knowledge815.6. Suggestions for Further Study82
REFERENCES83APPENDIX93