Determinants Of Income Increasing Accounting Choice: An Empirical Analysis of Nigeria's Manufacturing-Listed Firms

Abstract

In an era characterized by increased globalization, financial complexity, and heightened scrutiny of corporate financial reporting, accounting choices wield profound influence over an organization's economic standing and public perception. This study sought to shed light on the intricate interplay of factors that steer accounting choices geared toward income enhancement and financial success within the Nigerian manufacturing sector. This study adopted an ex-post facto research design, while the population and sample size comprised twenty-one consumer-goods manufacturing firms listed on the Nigerian Exchange Group (NGX). The data obtained from audited financial reports of the investigated firms were analyzed using both descriptive and inferential statistics. From the outcome of the study, management compensation had a significant negative effect on income and profit generation. In contrast, market conditions had a negative insignificant effect on income and profit generation, but asset turnover had a significant positive effect on income-generating policy. The study concluded that these variables are important factors in income-generating accounting choices in listed manufacturing firms in Nigeria. For policy implementation, the study recommends that manufacturing firms should review and potentially revise their compensation structures for management to ensure that incentives are closely aligned with financial performance goals.