ENVIRONMENTAL ACCOUNTING AND FINANCIAL REPORTING QUALITY OF QUOTED COMPANIES IN NIGERIA

Abstract

This study assessed the impact of environmental Accounting and reporting on the quality of information contents of Nigerian quoted service companies’ financial reporting. The study also developed a model for measuring the value of environment and how the value could be reported in the financial statements of quoted service companies in Nigeria. Descriptive and field survey research methods were employed in the study. Data were collected from the conduct of administration of questionnaire and financial statements of the selected quoted service companies. The data collected were analysed using Kendall’s Coefficient of Concordance (KCC), Pearson’s Chi-square technique, and the use of tables and percentages. KCC was used to find the concordance of selected experts regarding the nature and characteristics of environmental expenditure and necessity for their capitalisation. Pearson’s Chi-square was used to know the perceptions of questionnaire respondents on the significant effect that reporting environmental value would have on the ability of financial statements’ users to make informed decisions. The value relevance of the model developed was tested using Edwards-Bell-Ohlson Model. The study found that the nature and characteristics of investments on the environment require them to be capitalised rather than expensed. The study established that the value relevance of financial reporting of quoted service companies in Nigeria will be improved by the application of the developed model; thereby boosting the informed decision making abilities of the multiple users. The study recommended that quoted service companies in Nigeria should imbibe the culture of capitalising and reporting all expenditures/investments on environment that can improve their quality and productivity.