article1381160542_Unegbu and Tasie
.pdf
Unegbu and Tasie |
3823 |
Table 1. Contd.
27 |
Capital Micro |
Shares held by few related shareholders. |
2008 |
|
Finance Bank |
Company's first year of operations. |
|
|
Limited |
|
|
28 |
Gal-Bose Hospital |
Family company |
2005 |
|
Limited |
|
|
33.5% of pre-operational |
0.2 |
Probably not |
Going concern |
expenses written off does not |
|
falsified. |
|
equal to the amount shown in |
|
|
|
Note 16. |
|
|
|
Tax provisions in the P &L for the |
0.2 |
Probably not |
Going concern |
two years were treated as Tax |
|
falsified. |
|
paid in the Cash flows. |
|
|
|
29 |
Gal-Bose Hospital |
Family company |
2006 |
|
Limited |
|
|
30 |
Kautal Hairu |
Family company |
2008 |
|
Company Limited |
|
|
31 |
Ultimate Foods |
Family COMPANY |
2010 |
|
Limited |
|
|
32 |
Smart Products |
Two consecutive years' Negative Working Capital |
2006 |
|
Nigeria Plc |
and negative Accumulated retained earnings |
|
33 |
The Tourist |
Two consecutive years' negative Accumulated |
2006 |
|
Company of Nigeria |
retained earnings and EBIT |
|
|
Plc |
|
|
34 |
Benue Cement |
Two consecutive years' Negative Working Capital, |
2004 |
|
Company Plc |
negative Accumulated retained earnings & EBIT |
|
35 |
The Okomu Oil |
Two consecutive years' Negative Working Capital. |
2006 |
|
Palm Company Plc |
|
|
36 |
WTN Plc |
Current year has Negative Working Capital, |
1997 |
|
|
negative Accumulated retained earnings and |
|
|
|
EBIT |
|
37 |
Nigerian Wire |
Two consecutive years' Negative Working Capital |
1998 |
|
Industries Plc |
and negative Accumulated retained earnings |
|
No provisions for tax for 2005 and |
0.1 |
Probably not |
Going concern |
2006 year |
|
falsified. |
|
Tax provisions in the P &L for the |
0.2 |
Probably not |
Going concern |
two years were treated as Tax |
|
falsified. |
|
paid in the Cash flows. |
|
|
|
Tax provisions in the P &L for the |
0.2 |
Probably not |
Going Concern |
two years were treated as Tax |
|
falsified. |
|
paid in the Cash flows. |
|
|
|
None was detected |
0 |
Probably not |
Going concern |
|
|
falsified. |
|
None was detected |
0 |
Probably not |
Going concern |
|
|
falsified. |
|
There is a loss on disposal of fixed |
0.3 |
Probably falsified. |
Going concern |
Assets but proceeds from the sale |
|
|
|
are not shown in financing activity. |
|
|
|
None was detected |
0 |
Probably not |
Going concern |
|
|
falsified. |
|
None was detected |
0 |
Probably not |
Going concern |
|
|
falsified. |
|
None was detected |
0 |
Probably not |
Going Concern |
|
|
falsified. |
|
3824 Afr. J. Bus. Manage.
Table 1. Contd.
38 |
Presco Plc |
Two consecutive years' Negative |
2002 |
|
|
Working Capitals |
|
39 |
AFPRINT Plc |
Current year has Negative EBIT |
2004 |
40 |
Livestock Feeds |
Two consecutive years' Negative |
2009 |
|
PLC |
Accumulated retained earnings |
|
41 |
Mustang Company |
More than 51% of the shares are held by |
2005 |
|
Nig. Ltd |
two shareholders. |
|
42 |
Secure Electronic |
Two consecutive years' Negative |
2009 |
|
Technology Plc |
Accumulated retained earnings |
|
None was detected |
0 |
Probably not |
Liquidated |
|
|
falsified. |
|
None was detected |
0 |
Probably not |
Going |
|
|
falsified. |
concern |
None was detected |
0 |
Probably not |
Going |
|
|
falsified. |
concern |
None was detected |
0 |
Probably not |
Liquidated |
|
|
falsified. |
|
Schedule of fixed assets referred to as |
0.1 |
Probably not |
Going |
Note 1 is Not shown so as to help test |
|
falsified. |
concern |
how fixed assets purchased appeared |
|
|
|
in the Cash Flow Statement. |
|
|
|
43 |
Aviation |
Two consecutive years' Negative |
2005 |
|
Development |
Working Capital, negative Accumulated |
|
|
Company Plc |
retained earnings and EBIT |
|
44 |
Aluminum |
Two consecutive years' Negative |
2002 |
|
Extrusion Industries |
Working Capital and negative |
|
|
Plc |
Accumulated retained earnings |
|
None was detected |
0 |
Probably not |
Liquidated |
|
|
falsified. |
|
Tax liability of 2001 plus tax provisions |
0.3 |
Probably |
Going |
for the year minus tax paid shown in |
|
falsified. |
concern |
the Cash flow Statement did not |
|
|
|
reconcile with tax liability outstanding |
|
|
|
in 2002. |
|
|
|
45 |
UTC Nigeria Plc |
Two consecutive years' Negative |
2008 |
Net proceeds from Land disposal |
0.3 |
Probably |
Going |
|
|
Working Capital & negative Accumulated |
|
alone amounted to NN53, 854,000. |
|
falsified. |
concern |
|
|
retained earnings |
|
Profit on disposal of Land & other |
|
|
|
|
|
|
|
Fixed Assets( Note 8, Land disposed |
|
|
|
was added to total fixed disposed to obtain profit on disposal of fixed assets as N3,152,000 (Computed thus Sale proceeds N4,794,000 - NBV N1,642,000) to N4,794,000. Adjustments for Profit from Land disposal not made in Note 21. These treatments lack professional assertions.
|
|
|
|
|
|
|
Unegbu and Tasie |
3825 |
||
Table 1. Contd. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46 |
Reitzcot Nigeria |
Two consecutive years |
1999 |
Disposals during the year amounted to |
0.3 |
Probably |
Going |
|
|
|
|
|
Company Plc |
negative Accumulated |
|
N12, 551,968 as per Note 1. Profit on |
|
falsified. |
concern |
|
|
|
|
|
retained earnings and |
|
disposal in the Cash flow amounted to |
|
|
|
|
|
|
|
|
EBIT with Current year's |
|
N483, 000 while proceeds from disposals |
|
|
|
|
|
|
|
|
negative working capital |
|
amounted to N495, 000. These figures |
|
|
|
|
|
|
|
|
|
|
cannot be professional reconciled. |
|
|
|
|
|
47 |
BHN Plc |
Two consecutive years' |
2003 |
Note on how Net Cash provided by |
0.1 |
Probably |
Going |
|
|
|
|
|
|
Negative Working Capital |
|
operating activities is computed is not |
|
not |
concern |
|
|
|
|
|
and negative Accumulated |
|
shown. |
|
falsified. |
|
|
|
|
|
|
retained earnings |
|
|
|
|
|
|
|
48 |
Associated Bus |
Two consecutive years' |
2009 |
Assets costing N458,164,000 with |
0.3 |
Probably |
Going |
|
|
|
|
|
Company Plc |
Negative Working Capital |
|
accumulated Depreciation of |
|
falsified. |
concern |
|
|
|
|
|
|
|
N437,136,000(see Note 6) was disposed |
|
|
|
|
|
|
|
|
|
|
at a proceed of N60,200,000 shown in |
|
|
|
|
|
the Cash Flow Statement at a profit of N20,753,000 (Note 22). These figures cannot be professional reconciled.
49 |
United Nigerian |
Two consecutive years' |
2009 |
|
Textiles Plc |
negative Accumulated |
|
|
|
retained earnings & EBIT |
|
50 |
Nigerian Aviation |
Preceding year with |
2005 |
|
Handing Company |
negative Working Capital |
|
|
Plc |
|
|
51 |
AshakaCem Plc |
Two consecutive years' |
2009 |
|
|
Negative Working Capital |
|
None was detected |
0 |
Probably |
Going |
|
|
not |
concern |
|
|
falsified. |
|
Disposals during the year amounted to |
0.1 |
Probably |
Going |
N300, 000 and the asset was never |
|
not |
concern |
depreciated before disposal. |
|
falsified. |
|
None was detected |
0 |
Probably |
Going |
|
|
not |
concern |
|
|
falsified. |
|
Table 2. SPSS output 1: T-test group statistics.
CPT decision |
N |
Mean |
Std. deviation |
Std. error mean |
Frequency of occurrence Falsified |
19 |
9.7368 |
1.52177 |
0.34912 |
Not falsified |
32 |
18.2500 |
5.65115 |
0.99899 |
3826 Afr. J. Bus. Manage.
Table 3. SPSS output 2: Independent samples test.
|
Levene©s test for |
|
|
|
|
|
|
|
||
|
equality of |
|
|
|
t-test for equality of means |
|
||||
|
variances |
|
|
|
|
|
|
|
||
|
F |
Sig. |
t |
df |
Sig. (2- |
Mean |
Std. error |
90% confidence interval of |
||
|
tailed) |
difference |
difference |
the difference |
||||||
|
|
|
|
|
Lower |
Upper |
||||
|
|
|
|
|
|
|
|
|||
CPT decision Equal variances |
5.450 |
0.024 |
-1.898 |
49 |
0.064 |
-0.257 |
0.135 |
-0.484 |
-0.030 |
|
assumed |
||||||||||
|
|
|
|
|
|
|
|
|
||
Equal variances |
|
|
-1.855 |
39.509 |
0.071 |
-0.257 |
0.139 |
-0.491 |
-0.024 |
|
not assumed |
|
|
||||||||
|
|
|
|
|
|
|
|
|
||
Table 4. SPSS output 3: CPT analyses decision of liquidated status as at 2010.
Liquidated status as at 2010
Yes |
No |
Total |
Count Expected Count
Falsified Percentage within CPT decision Percentage within liquidated status as at
2010
Percentage of total
11 |
8 |
19 |
7.8 |
11.2 |
19.0 |
57.9% |
42.1% |
100.0% |
52.4% |
26.7% |
37.3% |
21.6% |
15.7% |
37.3% |
CPT Decision
Count Expected Count
Not falsified Percentage within CPT decision Percentage within liquidated status as at
2010
Percentage of total
Count Expected count
Total Percentage within CPT decision
Percentage within liquidated status as at 2010
Percentage of total
10 |
22 |
32 |
13.2 |
18.8 |
32.0 |
31.2% |
68.8% |
100.0% |
47.6% |
73.3% |
62.7% |
19.6% |
43.1% |
62.7% |
21 |
30 |
51 |
21.0 |
30.0 |
51.0 |
41.2% |
58.8% |
100.0% |
100.0% |
100.0% |
100.0% |
41.2% |
58.8% |
100.0% |
Table 5. SPSS output 4: Main Chi-square testsd.
|
Value |
df |
Asymp. Sig. |
Exact Sig. |
Exact Sig. |
Point |
|
(2-sided) |
(2-sided) |
(1-sided) |
probability |
||
|
|
|
||||
Pearson Chi-square |
3.494a |
1 |
0.062 |
0.082 |
0.058 |
|
Continuity correctionb |
2.481 |
1 |
0.115 |
|
|
|
Likelihood ratio |
3.491 |
1 |
0.062 |
0.082 |
0.058 |
|
Fisher's exact test |
3.426c |
|
|
0.082 |
0.058 |
|
Linear-by-Linear association |
1 |
0.064 |
0.082 |
0.058 |
0.043 |
|
N of Valid Cases |
51 |
|
|
|
|
|
a0 cells (0.0%) have expected count less than 5. The minimum expected count is 7.82.
bComputed only for a 2x2 table
cThe standardized statistic is 1.851.
Unegbu and Tasie |
3827 |
Table 6. SPSS output 5: Chi-square symmetric measures.
|
|
|
|
90% Confidence interval |
|
|
Value |
Approx. Sig. |
Monte Carlo Sig. |
Lower bound |
Upper bound |
Nominal by Nominal Phi |
0.262 |
0.062 |
0.079a |
0.075 |
0.084 |
Cramer's V |
0.262 |
0.062 |
0.079a |
0.075 |
0.084 |
Contingency |
0.253 |
0.062 |
0.079a |
0.075 |
0.084 |
Coefficient |
|
|
|
|
|
Number of valid cases |
51 |
|
|
|
|
a Based on 10000 sampled tables with starting seed 1314643744.
Table 7. CPT decision
CPT decision criteria |
Decision outcome |
Where Ag 0.3 |
Falsified. |
Ag 0.2 |
Not falsified. |
managerial decisions. CPT’ analyses Model offers financial stakeholders the recourse as a pre-ante tool for investment decisions, solvency analysis and bankruptcy predictions and shall be of great relevance to auditors who are not part of the falsification, tax authorities, financial analyst, investors, banks, other lending authorities and to forensic accountants for legal witnesses. Above all, the issues of falsification of financial statements in developing countries are of paramount importance in order to ensure real values are added to their economy. We, therefore, recommend a detail investigation on corporate governance since this study can help researchers to reconstruct ideas on how corporations should conduct their activities in relation to legal admissible financial statements.
REFERENCES
Abbott LJ, Paker S, Peters GF (2000). The Effects of audit committee activity and Independence on Corporate Fraud. Manage. Finan., 26: 55-67.
Altman EI (1968). Financial ratios, discriminant analysis and the prediction of corporate Bankruptcy. J. Finan., 23: 589-609.
Altman EI (2000). Predicting financial distress of companies using Z- score, Zeta models. (Working paper). Stern School of Business, New York University. pp. 1-20.
Aziz MA, Dar AH (2006). Predicting Corporate BankruptcyWhere we Stand? J. Corp. Govern., 6(1): 18-29.
Beasley SM, Carcello JV, Hermanson DR (1999). Fraudulent Financial Reporting: 19871997. An Analysis of US companies, Research report from Committee of Sponsoring Organizations of the Tradeway Commission (COSO), pp. 2-12.
Beaver W (1966). Financial Ratios as predictors of Failures Empirical research in accounting: selected studies. J. Account. Res., 4: 71-111 Benston JG (2003). The Quality of Corporate Financial Statements, Their Auditors before and after Enron Policy Analysis. pp.497: 45. Bharat AJ, Barin NN (1977). Performance evaluation of neural network
decision models. J. Manage. Info. Syst., 14(2): 201-216.
Charitou A, Neophtou E, Charalambous C (2004). Predicting Corporate FailureEmpirical Evidence for the Uk. Eur. Account. Rev., 13(3): 465-466, 492.
Cheeseman RH (2005). Enron Corporation Plunges into Bankruptcy. The Legal Environment of Business and Online Commerce 4th Ed Pearson Education Inc, New Jersey, p. 93.
Dambolena I, Shulman J (1988). A primary Rule for Detecting BankruptcyWatch the Cash. Finan. Anal. J., 44(5): 74
Gibson HC (2009): Financial Reporting & Analysis using Financial Accounting Information 11th edition. Thomson, South-Western, pp. 45 -425.
Heine L Max (2000): Predicting Financial Distress of Companies – Revisiting the Z-score and ZETA Models. J. Bank. Finan., pp. 1-25.
IFRS (2007): International Financial Reporting Standards, p.27.
Iyoha FO (2010): Social Accounting: An Imperative for Enterprise Development. The Nigerian Accountant 43(1): 3-4, 31.
Kieso DE, Weygant JJ, Warfield TD (2007). Intermediate Accounting 12th edition John Willey and Sons, New York, pp. 127, 171.
Messier FW, Glover MS, Prawitt F (2008). Auditing and Assurance Services (A systematic Approach) 6th Edition. McGraw-Hill International Edition, p. 82.
Mulford, C.W and Comiskey E.M (2002): Creative Accounting: Prevention and Detection http://www.pro2net.com. Assessed on 25/05/2010.
Naser K, Pendlebury M (1992). The Creative Touch. J. Cert. Account. 2: 36-38.
Okoye E, Ukenna S, Ugwanyi U (2009). Understanding and explaining the underpinnings of Creative Accounting in Nigeria: The Cadbury Evidence. Cert. Nat. Account. 17(1): 31.
Papoulias C, Theodossiou P (1992). Analysis and Modeling of Recent Business Failures in Greece. Manage. Decis. Econ., 13: 163-164.
Pietersz G (2007). Creative Accounting http://www.moneyterms. Co.uk. Assessed on 26/05/2010
Reeve MJ, Warren SC (2008). Principles of Managerial Accounting 9e. Thomson Higher Education USA, p. 18.
Tran M (2008). Emerging Economies www.answers.com/topic/emerging-markets Assessed on 20/06/2009.
Unegbu OA (2007). Advanced Financial Accounts 2ed. Shack Publishers Nigeria, p. 161.
Unegbu OA, Azubike JUB (2007). Group Accounts 2edShack Publishers Nigeria, p. 4.