Corporate Social Responsibility Accounting Practice And Financial Performance Of Listed Construction Firms In Nigeria

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Corporate Social Responsibility Accounting Practice And Financial Performance Of Listed Construction Firms In Nigeria


Abstract


This study was carried out to examine corporate social responsibility accounting practice and financial performance of listed construction firms in Nigeria. Specifically, the study aims to ascertain the relationship between corporate social responsibility accounting practice and return on capital employed of construction firms, establish the significant relationship between corporate social responsibility accounting and earnings per share of construction firms and establish the significant relationship between corporate social responsibility accounting and net profit margin of construction firms. The study employed the survey descriptive research design. A total of 141 responses were validated from the survey. From the responses obtained and analyzed, the findings revealed that there is a significant relationship between corporate social responsibility accounting practices and return on capital employed of construction firms. Also there is a significant relationship between corporate social responsibility accounting and earnings per share of construction firms. Lastly, there is a significant relationship between corporate social responsibility accounting and net profit margin of construction firms. The study thereby recommends that Organizations are also advised to invest a sizeable chunk to Corporate Social Responsibility Programmes, especially in provision of jobs and scholarships to host communities. This will, according to the findings of this paper, boost the image of their organization and re-enforce loyalty and organizational citizenship.


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organization of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE 

Chapter One


Introduction

1.1 Background of the Study

Business corporations have traditionally been conceptualized as economic entities with the main responsibility for producing goods and providing services as efficiently as possible. With the advent of the sustainable development these corporations began to move away from their narrow economic conception of responsibility and to make profound strategic adjustments in response to environmental pressures and changing societal expectations (Ramaprakasha, & Rajaram, 2017). The history of corporate social responsibility (CSR) is perhaps as old as the history of business itself, though the concept was not formally formulated until recently. (Saeid, Zabihollah, & Zahra, 2015). Insurance companies‟ practices are those of sharing losses, of spreading risk lightly over a great number of people so that few unfortunate people who sustain losses do not suffer heavy financial loss as a result of the misfortune. In the view of (Ohaka, 2018) the classical scenario of the business accounting for it activities to the stakeholders have more recently witnessed the appearance of interest groups. The interest groups include workers investors, the tax authorities, the host communities and non- governmental organizations. Thus, instead of only having a financial responsibility before its shareholders, it has moved towards a situation where a company has a social responsibility before its stakeholders. (Purnomo & Widianingsih, 2015), argued that organization social responsibility is represented by a series of obligationto not only safeguard its own interest (economic an effect upon owners, employers, but to be accountable to society‟s well being (local communities, environment, and national interests). (Osisioma, Nzewi, & Nwoye, 2015) added that the survival of every business depends on the accomplishment of these objectives. The two broad categories of business objectives expected to be accomplished include economic objectives and social objectives. While economic objectives are the targets to be accomplished in the marketing efforts of an organization, social objectives are associated with the aims of an organization towards satisfying the interest of its shareholders, employees, and the general public. Nevertheless, CSRA is not new to the financial reporting arena, presently in Nigeria, companies in their directors‟ reports are required to provide in some circumstances information regarding environment of employee involvement in companies‟ affairs and donation of charitable nature (CAMA, 2004 S.342 part 1 ch 5). Despite these importance CSRA is still at a slow paced, and the level of social disclosure among Nigeria companies is basically still low and at the embryonic stage which is mainly caused by various bottlenecks of environmental issues as opined by (Nzewi, Nzewi, Okerekeoti, 2017). Also, Nigeria insurance companies are still uncertain about the benefits of social reporting and the use of social reporting information benchmark has not been widely practiced. Against the above backdrop, this study is undertaken with a view to ascertain corporate social responsibility accounting practice and financial performance of listed construction firms in Nigeria


1.2 Statement of the Problem

Corporate Social Responsibility (CSR) has received growing interest among scholars and practitioners over the last decades. Although different definitions of CSR have been offered, the definition offered by Carroll seems to be the most widely accepted. He defines CSR as encompassing the economic, legal, ethical and discretionary expectations (philanthropic) that society has of organizations at a given point in time. Organizations operating in Nigeria have not done enough to improve the social welfare of the host communities where they operate despite huge profits reported annually [Okafor, 2018]. Companies are to focus on the ethics and legitimacy of their behavior with a view to demonstrating their social responsiveness to their stakeholders, which would help in enhancing their financial performance through enhanced patronage by investors who cherished socially responsible firms [Okafor, 2018]. Lack of CSR could therefore militate againstthe profit maximization or wealth maximization objective of the firm and companies demonstrate CSR when they have comprehensive set of responsible policies, practices, and programs toward society and the environment regarding business operations. Therefore, this study seeks to examine corporate social responsibility accounting practice and financial performance of listed construction firms in Nigeria.


1.3 Objective of the Study

The general objective of the study is to examine corporate social responsibility accounting practice and financial performance of listed construction firms in Nigeria.

The specific objectives is as follows:

  1. To ascertain the relationship between corporate social responsibility accounting practice and return on capital employed of construction firms.
  2. To establish the significant relationship between corporate social responsibility accounting and earnings per share of construction firms.
  3. To establish the significant relationship between corporate social responsibility accounting and net profit margin of construction firms

1.4 Research Questions

The following questions have been prepared the study

  1. To what extent does corporate social responsibility accounting practice affects return on capital employed of construction firms?
  2. What is the extent of relationship between corporate social responsibility accounting and earnings per share of construction firms?
  3. To what extent does corporate social responsibility accounting affects net profit margin.

1.5 Research Hypothesis

The following hypothesis have been formulated for the study

Ho1: There is no significant relationship between corporate social responsibility accounting practices and return on capital employed of construction firms.

Ho2: There is no significant relationship between corporate social responsibility accounting and earnings per share of construction firms.

Ho3: There is no significant relationship between corporate social responsibility accounting and net profit margin of construction firms.


1.6 Significance of the Study

The study under consideration is wholly important to all companies, organizations and enterprises as it addresses the need for companies to be socially responsible and ensure the interest of all stakeholders is dully considered in their operations and activities as the success of any business lies on its relationship with the environment and those who can be affected or whose actions can affect the organization. The study is also of immense benefit to government in her supervisory role of organizations as well as implementation of financial regulations. It will be an eye opener to agencies and regulators as they will be enlightened on the schemes employed by companies to manage earnings within and outside the ambit of existing laws. To the general public that comprises the broad categories of stakeholders, the study will help to disclose the rights over companies and what procedures to follow in order to address any company failing in performing its social corporate responsibilities.


1.7 Scope of the Study

The study will ascertain the relationship between corporate social responsibility accounting practice and return on capital employed of insurance companies. The study will also establish the significant relationship between corporate social responsibility accounting and earnings per share of insurance companies. Lastly, the study will establish the significant relationship between corporate social responsibility accounting and net profit margin of insurance companies.


1.8 Limitation of the Study

This study was constrained by a number of factors which are as follows:

Just like any other research, ranging from unavailability of needed accurate materials on the topic under study, inability to get data

Financial constraint , was faced by the researcher ,in getting relevant materials and in printing and collation of questionnaires

Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher


1.9 Definition of Terms

Corporate Social Responsibility:

The idea that a company should play a positive role in the community and consider the environmental and social impact of business decisions

Accounting Practice:

The process and activity of recording the day-to-day financial operations of a business entity

Construction Firms:

A capital-intensive business.


1.10 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows.

  • Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

In this study, our focus was to examine corporate social responsibility accounting practice and financial performance of listed construction firms in Nigeria using Julius Berger as a case study. The study specifically was aimed at highlighting ascertain the relationship between corporate social responsibility accounting practice and return on capital employed of construction firms, establish the significant relationship between corporate social responsibility accounting and earnings per share of construction firms and establish the significant relationship between corporate social responsibility accounting and net profit margin of construction firms. A total of 30 responses were validated from the enrolled participants where all respondent are drawn from staff of Dangote cement factory.


5.2 Conclusion

Based on the finding of this study, the following conclusions were made:

  1. There is a significant relationship between corporate social responsibility accounting practices and return on capital employed of construction firms.
  2. There is a significant relationship between corporate social responsibility accounting and earnings per share of construction firms
  3. There is a significant relationship between corporate social responsibility accounting and net profit margin of construction firms

5.3 Recommendation

  1. Organizations are also advised to invest a sizeable chunk to Corporate Social Responsibility Programmes, especially in provision of jobs and scholarships to host communities. This will, according to the findings of this paper, boost the image of their organization and re-enforce loyalty and organizational citizenship.
  2. Organizations are enjoined to create awareness on the availability and their participation in Corporate Social Responsibility Programmes. By doing this, host communities will be knowledgeable about them, hence, apply so as to enjoy the benefit(s)

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