FINANCIAL REPORTING AND TAX ISSUES IN NIGERIA

Sadiq Oshoke Akhor () and Dennis Onutomaha Akrawah ()
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Sadiq Oshoke Akhor: College of Education, Igueben, Benin City, Nigeria, Postal: Bursary Department,, https://journal.citn.org/
Dennis Onutomaha Akrawah: Chukwuemeka Odumegwu Ojokwu University, Anambra State, Nigeria, Postal: The Department of Accounting,, Faculty of Management Sciences, https://journal.citn.org/

Journal of Taxation and Economic Development, 2019, vol. 18, issue 1, 34-44

Abstract: The purpose of this study is to examine the relationship between financial reporting and tax issues in Nigeria. The objective of the study is to examine the relationship between deferred taxation, tax planning and financial reporting in Nigeria. The study adopts a longitudinal research design for the collection of secondary data for the period of 2012 to 2016 where thirty-two (32) quoted non-service company are randomly selected and employs Logistic regression for the empirical analysis. The empirical evidence shows that deferred taxation has a positive and a significant relationship with financial reporting at 1% level of significant across the models (Probit, Logit and Extreme value regressions), tax planning measured by cash effective tax rate has a positive and insignificant relationship with financial reporting even at 10% level of significant across the models (Probit, Logit and Extreme value regressions). And tax planning measured by income effective tax rate has a negative and insignificant relationship with financial reporting even at 10% level of significant across the models (Probit, Logit and Extreme value regressions). The study therefore recommends that financial managers and accountants should consolidate deferred tax liabilities for the intended purpose because it help to generate more cash flow to the organization for meeting operation activities. The study also suggests that management of quoted firms in Nigeria should employ stringent tax measures to cushion the incidence of cash effective tax rate and income effective tax rate.

Keywords: Financial Reporting; Deferred Taxation; Tax Planning; Logit Regressions (search for similar items in EconPapers)
Date: 2019
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