Organizational Culture and Financial Reporting Practices in Nigeria

Abstract

Organizational culture is an important parameter for business survival and growth. Effective management must take into account not only the financial data, as they are presented in business annual financial statements, but the way culture affects quantitative and qualitative organizational variables as well. The purpose of this study is to present the importance of organizational culture in terms of business performance and its interactive relationship with financial statements. In order to achieve that the study made use of an ex-post facto design for data collection from both primary and secondary sources. The data were analyzed using a simple regression model. The study revealed that Organizational culture does significantly influence financial reporting practices in Nigeria. The study concluded that the financial reporting practice is a socially dynamic process. It is a socially constructed reality involving interplay between individual, social values and organizations. Indeed, it can be seen that financial reporting practice reflects the ideas on an ethical social relationship. The study therefore recommended that compliance with regulations is determined by organizational culture. Thus a company with an ethical culture will more likely be committed to compliance with regulation and to quality financial reporting practice.

Keywords: Clan Oriented Culture, Adhocracy Oriented Cultures, Market Oriented Cultures        Hierarchy Oriented Cultures, Financial Reporting Practice