Abstract
The project examines the link between financial accounting and corporate governance in Nigeria. The study main objective is to reveal the relevance of financial accounting theory and corporate governance or corporate performance. This work explains the level of compliance of firms to government regulation as it affects their governance practices. The primary source of data collection was used in gathering data from respondents. A structured questionnaire was designed by the researcher which was used to capture the relationship between corporate governance and financial accounting.
The study concludes that accounting researchers should move beyond thinking about accounting information as providing a high degree of influence over the government practices of firms. Based on the findings, the study recommends that accounting information should be well structured and unique so that it can be useful in specific governance mechanism.
CHAPTER ONE
INTRODUCTION
Background to the Study
Corporate governance has been recognized and receiving a lot of attention in recent times. Corporate governance is not a new issue and has evolved with the growth of capitalist and the development of world economics. Corporate governance is concerned with overall polices, control, laws and numbs by which a corporation is directed, administered, control for the general interest of the shareholders.It aimed at understanding the dynamics or system put in place for the main objective to achieving corporate goals and recognition. These systems are currently refers to as mechanism of corporate governance. The way and manner a corporate entity is been governed and directed is determined by several factors of success and growth.
According to Chatu (1999), in a brief note address at the economics of Asian crisis and corporate economics government reforms 1999, (even the strongest economics lacking transparent transformation and control, responsible corporate board and good directors and shareholders right can collapse quite quickly as investor confident collapses.
Thus, replying that there is a need for the understanding and implementation of good corporate governance practices and procedures.At it broadest, corporate governance encompasses the framework of rules, regulation, relationship, systems and procedure within and by which judicious authority is exercised and governed in corporation (Wikipedia Root, 2006). Corporation practices should be made in such a way as to optimized result. Corporate governance has evolved as a result of the separation on ownership from management of corporation, enterprise and including some partnership ventures. This has called for the need to protect the image and interest of shareholders and their nonparticipating share holders of corporation.
Sheifer and Vishny (1998) were of the opinion that management and equity investors should be capable of going into a binding contract, which could ensure that investors and shareholders interest are fully guided and represented. The relationship between owners and managers of business entities is considered as principal agency relationship (Oyajide & Soyibo, 2001, p.2), according to them, the principal agency literature suggested that hired manager will not have the same objective, role and profile as the private investor (owners). Rather, they will use the firm specific rent to satisfy their own desired objectives and interest. This has resulted in the development of various governance codes and method and other regulated agencies to protect the interest of shareholders and enhance effective governance.