Impact of Statement of Accounting Standard 17 (Sas 17) on Financial Reporting Quality of Listed Oil Marketing Companies in Nigeria

Abstract

The aim of this study is to assess the degree of compliance with SAS 17 by the ten listed oil marketing companies in Nigeria. The population of the study consists of the total number of listed oil companies in Nigeria. There are currently nine (9) oil companies listed by the Nigerian stock exchange as at June 2018 (NSE Fact book, 2018). The sample size of the study is four oil companies. Data are obtained from the annual accounts and reports of listed Nigerian oil marketing companies that make up the working population for the study. Time frame for the study is ten years, covering period from 2003-2011. The disclosure requirements of SAS 17 are extracted and organized in what is termed disclosure index. Data captured in the study, will be analyze using descriptive statistical methods. The descriptive analysis involves the use of percentages, tabulations, and graphs etc, in analyzing data. Given that, the objective of the study is to measure the relationship between compliance with SAS 17 and financial reporting quality, Multiple Regression Technique will be use and the relationship between the variables will be obtained using Pearson Correlation.  A computer software known as Stata will also be used in order to put more clarity and have more robust result from the analysis. The study recommends thus, Companies operating in all sectors of economy need to embrace the culture of full disclosure in line with the requirements of the regulating agencies. The best of practice is full or 100% compliance as anything short of this is a dent on the reputation of the reporting entity, The council should ensure that henceforth all sanctions are enforced as this will deter would-be violators of provisions and disclosure requirements of the standards from perpetrating and perpetuating indiscipline in the accounting profession, the international Accounting Standards Board should come up with an updated International Financial Reporting Standard for the petroleum industry. This becomes imperative in view of the global convergence on the International Financial Reporting Standard as against the former practice of local GAAPs and All the operators in the upstream sector should be compelled to list their shares in the Nigerian Stock Exchange. This will strengthen financial reporting practice and at the same boost the transparency of multinationals in the industry as quotation implies higher level of regulation