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Forestalling Ingenious Approach to Financial Reporting in Post IFRS Regime in Dangote Cement Company Nigeria PLC

Ikechukwu Okoye, Nwoye John Ugochukwu and Mary-Fidelis Abiahu

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2018, vol. 8, issue 2, 259-271

Abstract: This research work focused on the role played by predictive models in proactively forestalling ingenious approaches otherwise known as creative accounting to IFRS based financial reporting practices of manufacturing companies. It examined the contributions made by the predictive models in predicting creative accounting practices in the selected manufacturing company in Nigeria, while making further effort at determining whether or not the predictive capabilities of the Beneish 8-Predictive variables and the Altman model differ significantly. The research work was quantitatively designed. Dangote Cement Plc, the only Nigerian manufacturing company that made the list of Forbes 2015 top 2000 companies in the world was purposively and judgmentally sampled. Thus, data obtained from secondary sources comprising Annual Reports and Audited Accounts of Dangote Cement Nigeria Plc (2000–2015), published journals, Articles, Inaugural lectures etc, were used for the successful completion of this work. Inputs from the Annual Reports and Accounts were analysed with the aid of Beneish 8-Predictive variables and Altman model using the Multiple Regression Analysis, and Wilxocon statistical techniques. The result of the analyses showed that the Beneish 8-Predictive variables made significant contributions in predicting possible Creative Accounting practices in Dangote Cement Nigeria Plc. It also found that there was no significant difference in the predictive capability of the Beneish 8-Predictive variables and the Altman Z-score model when jointly applied in predicting possible tendencies of Creative Accounting practices in publicly listed manufacturing companies in Nigeria. As a result, the study recommended that Professional Accountants and the Internal Auditors in Dangote Cement Company Plc need to tighten up their audit belt firmly and sceptically through the individual or joint discrete application of multiple Creative Accounting predictive and deterrence models/ratios to ensure that greater emphasis is also placed on the data integrity/quality of the financial reports and not just on their IFRS disclosure qualities.

Keywords: Altman Model; Beneish 8-Predictive Variables; Creative Accounting Practices; Dangote Cement Company; Financial Data Integrity; IFRS (search for similar items in EconPapers)
Date: 2018
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