CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE REPORTING IN NIGERIA ABSTRACT This study is motivated by a desire to examine the influence of corporate social responsibility on corporate reporting in Nigeria. In light of the empirical review and other discussions, a number of questions arose: How relevant is corporate social responsibility to corporate reporting in Nigeria? Does financial reporting of corporate firms enable managers and investors to identify and evaluate investment opportunities? Is there any relationship between corporate social responsibility and corporate reporting in Nigeria? And are there benefits to companies for being socially responsible? The empirical findings revealed among other things that, Corporate social responsibility influence corporate reporting in Nigeria, it was also revealed that financial reporting of corporate firms enable managers and investors to identify and evaluate investment opportunities, we also ascertained that there is relationship between corporate social responsibility and corporate reporting in Nigeria. Recommendation therefore made in the concluding chapter of this study based on the findings obtained. TABLE OF CONTENTS CHAPTER ONE Background of the Study Statement of Research Problem Objective of Research Work Research Hypothesis Scope of the Study Significance of Study Limitations of the Study Research Methodology Definition of Terms References CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction 2.2 Broad Definition of Corporate Social Responsibility 2.3 Overview of Corporate Social Responsibility and Agency Problems 2.4 Perspectives to Corporate Social Responsibility 2.5 Argument For and Against Social Responsibility 2.6 Approaches to Social Responsibility 2.7 Factors Affecting Social Responsibility 2.8 Corporate Social Responsibility in Nigeria 2.9 Corporate Financial Reporting 2.10 Quantitative Financial Statements 2.11 A Hierarchy of Accounting Information Qualities 2.12 Types of Financial Statements 2.6 Complexity, Relevance and Clarity of Corporate Reporting 2.13 Objectives of Corporate Financial Reporting 2.8 International Financial Reporting Standards (IFRS) 2.14 Corporate Financial Reporting in Nigerian Banking Sector 2.15 Relationship between Financial Representing System And Corporate Governance 2.16 Empirical Analysis of Corporate Reporting System in Banks 2.17 Factors That Affect the Quality of Corporate Financial Reporting 2.18 The Role of Management in Corporate Financial Reporting 2.19 Proactive Steps Taken to Reduce Incidence of Inaccurate Corporate Financial Reporting References CHAPTER THREE: RESEARCH METHODOLOGY Introduction Research Design Population Sample and Sampling Technique Research Instrument Reliability of the Instrument/Data Analysis Method References CHAPTER FOUR: DATA ANALYSIS AND INTERPRETATION 4.1 Introduction 4.2 Descriptive Statistics 4.3 Test of Hypothesis CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS AND CONCLUSION 5.1 Summary of Finding 5.2 Recommendations 5.3 Conclusion Bibliography Appendix CHAPTER ONE BACKGROUND OF THE STUDY Responsible practices by private firms have been under careful scrutiny in the last few years, mostly as a result of a few very visible cases of corporate misgovernance (Carlos M. Jarque 2005). Unease with the narrower issue of corporate governance has reinforced the concerns of government and especially civil society regarding the relationship between firms, society and the environment in which they operate. These concerns have arisen in the context of increasing globalization resulting pressures to remain competitive. In the opinion of many, this has led to heightened risks of misbehaviour by private firms. At the same time, concern about the prevalence poverty and underdevelopment in many countries has highlighted the importance of engaging the private sector in assisting governments to solve these problems, in particular, the achievement of the Millennium Development Goals. All these factors have led to a resurgence of the concerns with the issue of corporate social responsibility (CSR), which in its broader view, refers to the actions that firms take to carry out their activities in a responsible manner, respecting the government, the community and the workforce and also creating opportunities to enhance them (Ikhifa G. (2010). On the other hand, financial reporting, according to Nzekwu (2007), supplies key quantitative representation of individual corporations that support a wide range of contractual relationships and enhance the information environment more generally while its quality also impacts on firms' cash flows as well as influencing the cost of capital on which the cash flows are discounted. He (Nzekwu) added that financial reporting about firms and their competitors enable managers and investors to identify and evaluate investment opportunities. Thus, the "absence of reliable and accessible information in an economy impedes the flow of human and financial capital towards sectors that are expected to have high returns and away from sectors with poor prospects". Therefore, Nzekwu noted that financial accounting information enhances economic performance by reducing adverse selection and liquidity risk. For the past few decades, probably, no issue has attracted and received more attention by business organizations, politicians, government and the public in general than the issue of corporate social responsibility (CSR) and what the social responsibility of business is. Every business or firm is linked with different interest groups which form the stake holders of the business or firm. These stake holders or interest group contribute to the growth and survival of the business and hence expect to be compensated. For many years, managers and theorist have talked about an organisation responsibility to society (Stoner et al 1995:97). But opinions about what social responsibility of business firms is vary among experts and authorities. However, corporate social responsibility focuses on what an organization does that affects the society in which it exist (Stoner et al, 1995:97). There are many reasons why it is important for managers and organizations to act ethically and to do everything possible to avoid harming stakeholders (Jones et al, 2000:160). Several advantages are argued to result when manager and firms behave in a socially responsible manner. First, it has been pined that if all organization in a society are socially responsible, the quality of life as a whole would be better. Second, employees and the public benefit directly because firms (rather than the government) bear some of the cost of helping employees. Indeed, several management experts have argued that the manner business or firms behave toward their workers determines many of a society’s values and norms and the ethics of its citizens. It has been opined that if all firms adopted a caring approach and agreed that their responsibility is to promote the interests of their workers, a climate of caring would pervade the wider society. For business to operate within an environment, they must take into consideration in their every action, those elements of the surroundings which are essential to them and to others. Business and managers know that they must interact with, and live within an existing environment. This implies that they must consider every element in their environment that is important to their success and important to other stakeholders who may be affected by their actions. This is a must do, since the growth and survival of their business relies upon the successful interaction with the important elements of their environment (McOliver and Yomere, 1999:161). Corporate establishments or businesses should not only be responsive to their employees, shareholders and few of other stakeholders, but also their host community (or communities) and the society at large. Their host community (or communities) should feel the firm’s positive impact, such as in the area of provision of social amenities and creation of job opportunities. It has been contended that the adoption of a robust corporate social responsibility strategy and implementation of the same by business firms will help to address critical national challenges including wide spread poverty, inadequate infrastructures, corruption, inadequate job opportunities and the resultant social unrest. A case in point is the unending youth restiveness in the Niger Delta of Nigeria. It is in view of the constant recurring and unending disputes between business firms and their host communities that motivated this research work. STATEMENT OF RESEARCH PROBLEM Responsible entrepreneurship is not new, most enterprises particularly small ones have always been close to their communities where they operate and have sought to be good corporate citizen since the dawn of human commerce. Indeed, many enterprises instinctively know that doing the right things such as servicing customers, looking after staff, protecting the environment should be accounted for. In the light of this, the following research questions are being raised. How relevant is corporate social responsibility to corporate reporting in Nigeria? Does financial reporting of corporate firms enable managers and investors to identify and evaluate investment opportunities? Is there any relationship between corporate social responsibility and corporate reporting in Nigeria? Are there benefits to companies for being socially responsible? Are there laws and regulations binding corporate bodies for performing social responsibility? OBJECTIVE OF RESEARCH WORK The objectives of this study are: To examine the impact of corporate social responsibility to corporate reporting in Nigeria. To find out if financial reporting of corporate firms enable managers and investors to identify and evaluate investment opportunities. To ascertain the relationship between corporate social responsibility and corporate reporting in Nigeria. RESEARCH HYPOTHESIS The following hypotheses have been formulated to serve as a base for this research; Hypothesis I Ho: Corporate social responsibility does not influence corporate reporting in Nigeria. H1: Corporate social responsibility influence corporate reporting in Nigeria. Hypothesis II Ho: Financial reporting of corporate firms did not enable managers and investors to identify and evaluate investment opportunities. H1: Financial reporting of corporate firms enable managers and investors to identify and evaluate investment opportunities. Hypothesis III Ho: There is no relationship between corporate social responsibility and corporate reporting in Nigeria. H1: There is no relationship between corporate social responsibility and corporate reporting in Nigeria. SCOPE OF THE STUDY This research work is an empirical study of the influence of corporate social responsibility on corporate reporting in Nigeria. The population of the study is Nigeria, while the sample is some selected public companies in Nigeria. This study will involve assessing corporate firm in the discharge of their social responsibility as well as their corporate reporting. SIGNIFICANCE OF STUDY This project work is to unveil the influence of corporate social responsibility on corporate reporting in Nigeria. This study will be important and beneficial to stakeholders, host community of corporate firms on the important of corporate social responsibility. It will assist the government and regulatory agencies on the proper conduct of corporate social responsibility as well as financial reporting in Nigeria. This study will help to restore the lost confidence of the public as regard the corporate social responsibility and corporate reporting in Nigeria. Both academic and other future researchers in this similar subject matter will find it a useful source of learning and research. LIMITATIONS OF THE STUDY There is no study undertaken by a researcher that is perfect. As such this study is not a perfect one. This is due to some constraints that affect the student researcher in the course of the study. These constraints are: Inadequate Study Materials: Research materials were of limited supply due to the practicality of the study. Where they were available; the cost involved in sourcing for them was very expensive. Lack of Access to Current Data: Most managements and staff of the establishment would not want to disclose important or relevant information about their organizations on this subject matter, except were such is permitted by law to be disclosed. RESEARCH METHODOLOGY This study will make do with both the primary and the secondary data. The primary source of data collection will based on the information obtained through questionnaires administered to elite respondents. A total of 100 questionnaires will be administered to respondents. Thereafter, Z-test statistics will be used to test the relationship between the two variables. The decision rule for this test statistics is that the null hypothesis will be rejected if the calculated value of Z-test is found to have exceeded the table value at 5% level of significance. DEFINITION OF TERMS Financial Reporting: Is the process of preparing and distributing financial information to users of such information in various forms. The most common format of financial reporting are financial statement. Financial statement are prepared in accordance with rigorously applied standards defined by professional accounting bodies developed to the legal and professional frame work of a specific local. (Wikipedia English-The free Encyclopedia). Corporate Social Responsibility (CRS): CRS also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business is a form of corporate self regulation integrated into a business model. CSR policy function as a built in, self–regulating mechanism whereby business monitors and ensures its active compliance with the spirit of law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the companies actions and encourage a positive impact through it; activities on the environment. Social Responsibility: The American society for quality defines “Social responsibility” as people and organization behaving and conducting business ethically and with sensibility toward social, cultural, economical and environmental issues. Striving for social responsibility helps individuals, organization and government have a positive impact on development, business and society. Responsibility: Is all about that social force that binds you to the course of action demanded by that force, every opportunity, and obligation, every possession, a duty John – D. Rockefeller Jr). REFERENCES Nzekwu G. (2007) "Corporate Governance Now Critical in Nigeria World Bank" Vanguard-business, March 8th. Ikhifa G. (2010), Corporate Social Responsibility of Small and Medium Enterprises in Nigeria, Undergraduate Project submitted to the Department of Accounting, University of Benin, Benin City. James. A.F. Stones, Edward Freeman, Daniel Elibert (1995), corporate social responsibility and corporate covernance: The contribution of economic theory and related discipline. International economic association. Management, 2nd edition, UK Prentice hall international. Dayton L. Jones, Ann Welrle, David Meier, and Glenn Piner, (2000), “conflict management in Nigerian University Libraries” Library management Vol. 27 Iss: 8, pp. 520 – 530. “The radio jets and accretion disk in NEC 4261” Astrophysical journal, 534, 165.
CORPORATE SOCIAL RESPONSIBILITY OF BUSINESS FIRMS IN NIGERIACORPORATE SOCIAL RESPONSIBILITY OF BUSINESS FIRMS IN NIGERIA ABSTRACT This research project is a very crucial study for business firms operating in Nigeria and more specifically, Guinness Nigeria Plc. The study was motivated by the necessity to establish the extent of corporate social... More
CORPORATE SOCIAL RESPONSIBILITY PRACTICES OF BANKS IN NIGERIA CORPORATE SOCIAL RESPONSIBILITY PRACTICES OF BANKS IN NIGERIA ABSTRACT This study examined corporate social responsibility practice of banks in Nigeria. In light of the empirical review and other discussions, a number of questions arose as to whether leverage exerts a positive influence on bank’s... More
CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE IN NIGERIA BANKING SECTORCORPORATE SOCIAL RESPONSIBILITY DISCLOSURE IN NIGERIA BANKING SECTOR ABSTRACT This study examined corporate social responsibility disclosure in Nigeria banking sector. The study specifically aimed at determining the impact of firms’ size on corporate social responsibility disclosure in Nigeria;... More
CORPORATE SOCIAL RESPONSIBILITY AND FIRM PERFORMANCECORPORATE SOCIAL RESPONSIBILITY AND FIRM PERFORMANCE ABSTRACT The broad objective of this study is to examine the effect of corporate social responsibility and firm performance. The specific objectives are to examine the impact of corporate social responsibility and firm performance, identify the... More