Accounting Conservatism and Financial Performance of Publicly Quoted Oil and Gas Companies in Nigeria
The study investigates the effect of accounting conservatism on financial performance of publicly quoted oil and gas companies in Nigeria. Ex-post facto research design was used and secondary data were collected from audited financial statements of the companies from 2008 -2022. The panel regression results revealed that accounting conservatism has a positive significant effect on return on assets (coefficient 0.3545; p-value = 0.003). On the other hand, accounting conservatism has a positive insignificant effect on return on investment (coefficient 0.0519; p-value = 0.877). Meanwhile, financial leverage negatively moderates between accounting conservatism and return on asset (coefficient = -3.7681; p-value = 0.000). The study submits that management of the oil and gas companies should continuously monitor how these conservative practices affect financial performance and adjust as necessary to ensure that they are aligned with the overall financial strategy. Since financial leverage positively moderates the relationship between accounting conservatism and return on asset, companies should evaluate their capital structure to ensure that they are leveraging effectively. This study offer valuable insights into dynamics of accounting conservatism of oil and gas companies as well as providing guidance for future research in accounting.
Keywords: Accounting conservatism, Return on assets, Return on investment, Financial leverage, Financial performance; Oil and gas companies
