Title: Evaluating the Impact of Accounting Practices on the Performance of Oil and Gas Companies in the Niger Delta
Authors: AARON Clinton Chika
Volume: 9
Issue: 6
Pages: 223-231
Publication Date: 2025/06/28
Abstract:
This study investigates the impact of accounting practices on the performance of oil and gas companies operating in the Niger Delta region of Nigeria. Against the backdrop of increasing stakeholder demand for financial transparency and operational accountability, the study explores how financial reporting standards, cost accounting systems, and internal control mechanisms influence corporate performance indicators such as profitability, operational efficiency, and financial stability. The research adopts a descriptive survey design and utilizes structured questionnaires administered to 200 accounting professionals in 20 selected oil and gas firms, with 178 valid responses analyzed using correlation and multiple regression techniques. Findings reveal a significant and positive relationship between accounting practices and firm performance. Specifically, internal control mechanisms exhibited the strongest effect (? = 0.409, p < 0.01), followed by financial reporting standards (? = 0.316, p < 0.01), and cost accounting systems (? = 0.241, p < 0.01). The model explains 57.4% of the variation in firm performance (Rē = 0.574), confirming that sound accounting practices are critical drivers of corporate success in the capital-intensive and risk-prone oil and gas sector. The study concludes that robust accounting systems enhance transparency, promote cost efficiency, and strengthen financial resilience. It recommends that oil and gas firms prioritize internal control frameworks, comply fully with International Financial Reporting Standards (IFRS), and adopt modern cost accounting methods. Regulatory bodies should also enforce accounting compliance and support capacity building across the sector to improve governance and sustainable performance.