Usefulness of Accounting Theory and Practices on Banking Sectors in Nigeria: Empirical Evidence from Basel Accord

Abstract

The Nigerian banking sector has undergone thorough tremendous changes in the last decade, its financial stability and performance being paramount in the achievement of a stable and sustainable economic growth. Thus, the study examines usefulness of accounting theory and practices on banking sectors in Nigeria with empirical evidence from Basel Accord using time series data from 1983 to 2016. The study adopt regression analysis to empirically examine usefulness of accounting theory and practice on banking sector in Nigeria with and without implementation of Basel Accord. The study found that the implementation of Basel Accord 1 strengthens the effect of liquidity on the capital adequacy of Nigerian banking sectors and concluded that accounting practice and theory has positive effect on the Nigerian banking sectors. In view of this, it is recommended that Nigerian banking sectors should fully comply with the implementation of guidelines as specified in the Basel Accord I.

Keywords: Accounting practices, Accounting theory, Banking Sectors, Basel Accord.