EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON ACCOUNTING CONSERVATISM IN NIGERIAN BANKING INDUSTRY
Abstract
The purpose of this study is to examine the impact of corporate social responsibility (CSR) on conservative accounting in the Nigerian banking sector. The role of her CSR in organizational activities is still being debated. However, there is no consensus on the usefulness of CSR for private companies. A quantitative study design, more specifically an experimental study design, was used in this study. The main findings of this study were that CSR as a proxy for community spending, employee-related spending, and environmental management spending was negligibly positive for the conservative accounting of selected savings banks in Nigeria. showed that the influence of A million naira increase in social spending, employee relations and environmental management spending increases conservatism by about 0.01%, 1.1% and 0.04% respectively. To that end, the study concludes that while corporate social responsibility fosters conservatism in Nigeria’s banking sector, its impact is not strong.
Keywords; Conservatism, Corporate Social Responsibility, Community Spending, Environmental Management Spending, Employee Relations Spending.
word count:
chapter One
Foreword
1.1 Research background
The principle of accounting conservatism or prudence is one of the restrictions that affect accounting information because it requires recording minimum levels of assets and income and higher values of expenses and losses. ; Saad & Hanan, 2015). Accounting conservatism has been criticized as implying pessimism, but it is associated with accounting distortions that allow for misinterpretation and, as a result, compromise the suitability, reliability and comparability of accounting information. Influencing. However, this did not prevent conservatism from being viewed as one of the most important accounting concepts, playing an important role in accounting practice and being of great concern to accountants and auditors.
The issue of corporate social responsibility in the Nigerian banking industry has become a concern as disclosures of expenditures by banks are usually found on the first page of financial statements (Omodero & Ogbonnaya, 2017). Corporate social responsibility has received so much attention that researchers want to know its impact on corporate performance, financial performance, operating performance, operational efficiency, and accounting conservatism. Adequate disclosure of the social costs incurred by Nigerian banks over the years is impressive as stakeholders and other end-users of accounting information need it to make important decisions. This means that Nigerian banks have always published their social spending. The banking sector needs to improve what it is already doing because its presence benefits all stakeholders, not just shareholders. There is no generally accepted definition of corporate social responsibility in the literature. However, scholars and authors have proposed different definitions that fit the contextual framework of corporate social responsibility, especially in local communities and across nations.
Corporate social responsibility is also known in the literature as corporate responsibility, corporate citizenship, social enterprise, sustainability, corporate governance, sustainable development, business ethics, and the triple bottom line (Bassen, Holzen & Schlange, 2008). Siegel (2007) defines corporate social responsibility as all activities that are not required by law in the country in which the company operates and do not serve the primary interests of the company but serve the interests of society. doing. Furthermore, Shehu (2015) states that corporate social responsibility means that an organization, in conducting its day-to-day operations, needs to consider the impact of its activities on members of the society in which it operates. claim.
The purpose of this study is to examine the impact of corporate social responsibility (CSR) on conservative accounting in the Nigerian banking sector. Their CSR’s role in organizational activities is still being debated. However, there is no consensus on the benefits of his CSR for private companies. A quantitative study design, more specifically an experimental study design, was used in this study. The main result of this study is that CSR as a proxy for social spending, employee-related spending, and environmental management spending is negligibly positive for the conservative accounting of selected savings banks in Nigeria. That’s what it means. An increase of 1 million naira in social spending, employee relations and environmental management spending was shown to increase conservatism by approximately 0.01%, 1.1% and 0.04% respectively. To this end, the study concludes that while corporate social responsibility fosters conservatism in Nigeria’s banking sector, its impact is not strong.
Keywords; Conservatism, Corporate Social Responsibility, Community Spending, Environmental Management Spending, Employee Relations Spending.
word count:
chapter One
preface
1.1 Research background
Conservative or prudent accounting principles are among the restrictions that affect accounting information because they require the recognition of minimum asset values and incomes, and higher values of expenses and losses. ; Saad & Hanan, 2015). Accounting conservatism has been criticized as connoting pessimism, but it is associated with misleading accounting biases, which in turn affect the validity, reliability and comparability of accounting information. increase. influence. However, this did not prevent conservatism from being considered one of the most important accounting concepts. It plays an important role in accounting practice and is of great importance to accountants and auditors.
The issue of corporate social responsibility in the Nigerian banking industry has become a concern as disclosures of bank expenses are usually found on the first page of financial statements (Omodero & Ogbonnaya, 2017). Corporate social responsibility has received so much attention that researchers want to know its impact on corporate performance, financial performance, operating performance, operational efficiency, and accounting conservatism. The fair disclosure of social costs incurred by Nigerian banks over the years is impressive as it requires stakeholders and other end-users of accounting information to make important decisions. This means that Nigerian banks have always published their social spending. The banking sector needs to improve what it is already doing because its existence benefits not only shareholders, but everyone involved. There is no generally accepted definition of corporate social responsibility in the literature. However, scholars and authors have proposed various definitions that fit the contextual framework of corporate social responsibility, especially across communities and countries. Corporate social responsibility is also known in the literature as corporate responsibility, corporate citizenship, social enterprise, sustainability, corporate governance, sustainable development, business ethics, and the triple bottom line (Bassen, Holzen & Schlange, 2008). Siegel (2007) defines corporate social responsibility as all activities that are not required by law in the country in which the company operates and do not serve the primary interests of the company, but serve the interests of society. Define. do. Furthermore, Shehu (2015) states that corporate social responsibility means that an organization must consider the impact of its activities on the members of society in which it operates when conducting its day-to-day operations. increase. legal action.
This study examines the impact of corporate social responsibility on accounting conservatism in Nigeria, with a focus on the banking industry. The survey covers his six years from 2011 to 2016. In terms of measurement variables, accounting conservatism is represented by book value of stock at market value, corporate social responsibility is represented by community spending, employee relations spending. The environment is recorded as an administrative fee.
1.8 Definition of key terms
Corporate Social Responsibility:
It refers to an organization’s sense of responsibility towards the communities and environments (both environmental and social) in which it operates. Businesses demonstrate their citizenship through waste and pollution reduction processes, organizing educational and social programs, or making reasonable returns on the resources they use. Accounting conservatism:
This is an accounting principle whereby expenses and liabilities are recognized as soon as possible when there is uncertainty about the outcome, and income and assets are recognized only when their receipt is certain. According to this principle, losses are recognized when there is uncertainty about the occurrence of losses, and no profits are recognized when there is uncertainty about recognition of profits.
Social costs:
This refers to the costs incurred for the development of the region and society. It shows the cost of business performance to your organization.
Employee-related spending:
This is related to the cost of staff benefits and material benefits. Environmental management fee:
This shows spending on environmental improvements. It is equally related to the cost of environmental management.
Banking industry:
It is a network of financial institutions licensed by the government to provide banking services. The main services offered include holding financial assets for others, investing those financial assets as leverage to create more wealth, extending credit, and various It includes managing the risks associated with holding forms of wealth.
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