Title:
EFFECTS OF ACCOUNTING PRACTICES ON SHAREHOLDERS’ WEALTH: EVIDENCE FROM SKYE BANK PLC, NIGERIA (NOW POLARIS BANK PLC)

Authors:
John Ogenyi Oboh*, Gabriel Femi Goodwill, John Prince Edu, Nigeria

Abstract:

The study focuses on the Effects of Accounting practices on shareholders’ wealth using Skye Bank (now Polaris Bank) of Nigeria Plc as case study. It examines the relationship between accounting practices and shareholders’ wealth and assesses the effectiveness of accounting practices as a strategy to achieve increased shareholders’ wealth of Skye Bank of Nigeria. To achieve the above objectives, a multiple linear regression technique was used to analyze the relationship between accounting practices and shareholders wealth. The secondary data were collected from NSE handbook, relevant textbooks, finance journals, financial statements from the website of Skye Bank of Nigeria. Data were analyzed for descriptive and inferential statistics using SPSS version 21. Descriptive statistics such as tables and percentages analysis were used for presentation of data. Based on the analysis, it was found that tax planning and compliance with ethical framework of accounting have positive relationships with the return on equity of Skye of Nigeria and these relationships were significant while compliance with compliance with prudence principle has a significant negative relationship with ROE. In the light of the above, the study recommended that banks should ensure that strong internal control and corporate governance mechanism are maintained so as to mitigate the effect of prudence principle on the wealth maximization of shareholder emphasizing that the watchdogs of accounting profession in the country should be strict on the accounting practices issues.