Effect of Backflush Accounting on Financial Performance of Quoted Food and Beverage Firms in Nigeria

Abstract

The aim of this study is to determine the effect of backflush accounting on financial performance with particular referenceto food and beverage firms. This study therefore, examines the effect of Backflush accountingon financial performanceof food and beverage firms quoted on Nigeria Stock Exchange from 2010 to 31stDecember 2015. The research designemployed in this study is the ex-post facto research. An ex-post facto research determines the cause-effect relationshipamong variables. Only secondary data was used in this study. Three hypotheses were formulated and tested in the courseof this study. The Statistical tools used to test the hypotheses were coefficient of correlation and ordinary least squareregressionwith the aid of STATA 13 statistical software. The study revealed that backflush accounting has a positive andstatistically significant effect on ROA, ROE, and EPS of food and beverage firms quoted on the floor of Nigerian StockExchange at 5% level of significance. The researchers recommend among others that manufacturing firms should try toenforce the use of emerging new trends in management accounting practice even though it might not be cost effective interms of staff training and cost of acquiring the technology, but the benefits outweighs the costs in the long run.