Journal Screenshot

International Journal of Academic Research in Accounting, Finance and Management Sciences

Open Access Journal

ISSN: 2225-8329

Corporate Social Responsibility Accounting and the Effect of Donations on Profitability of Oil and Gas Companies in Nigeria

John OHAKA, Odinakachukwu I. OGALUZOR

http://dx.doi.org/10.6007/IJARAFMS/v8-i3/4835

Open access

There is a crying need for an in-depth study into the quality, extent of corporate social responsibility (CSR) disclosure and identification of areas for future improvement so that transparency can be ensured, especially in developing countries like Nigeria where CSR practices are limited. Based on this we carried out this study on corporate social responsibility accounting and the effect of donations on profitability of oil and gas companies in Nigeria. The study used a cross sectional survey design to carry out the research. The population of the study was all the oil and gas companies in Nigeria. Data collected were analyzed through the Simple Regression Analysis and Partial Correlation. Results of the study revealed that: Donation significantly affects Return on Equity and Donation significantly affects Net Profit of the oil and gas companies in Nigeria, Hence, from the findings of this work the research concludes that there is a strong positive relationship between CSRA and profitability. And that; Donation significantly affects the Return on Assets of the oil and gas companies in Nigeria; Donation significantly affects the return on equity of the oil and gas companies in Nigeria; Donation significantly affects the Net Profit of the oil and gas companies in Nigeria. Therefore all the null hypotheses have been rejected and the alternative hypotheses accepted. Based on the findings of the study, the following recommendations were made; Companies should carry out operational impact evaluation. This is in order to evaluate the effect of their operation on the community, the environment and the people as this will be able to audit and control their CSR practices. It will help them check unwholesome practices; Companies should report regularly to its stakeholders their corporate social responsibility practices. The companies are too secretive and do not allow the people have insight of most of their activities. Forums should be created where these are reported to the people; Government should consider allowable all arm’s length expenditure on corporate social responsibility for tax purposes to enable the companies become completely socially responsible.

1. Ajide, F. M. & Aderemi, A. A. (2014). The effects of corporate social responsibility activity disclosure on corporate profitability: Empirical evidence from Nigerian commercial banks. IOSR Journal of Economics and Finance (IOSRJEF), 2(6), 17–25.
2. Awan, A. G., & Akhtar, N. (2014). The Impact of Corporate Social Responsibility (CSR) on Profitability of Firms: A Case Study of Fertilizer & Cement Industry in Southern Punjab, Pakistan. Retrieved from http://www.eajournals.org/wp-content/uploads/The-Impact-ofCorporate-Social-Responsibility-CSR-on-Profitability-of-Firms-A-Case-Study-ofFertilizer-Cement-Industry-in-Southern-Punjab-Pakistan.pdf.
3. Babalola, Y. A. (2012). The impact of corporate social responsibility on firms’ profitability in Nigeria. European Journal of Economics, Finance and Administrative Sciences, 45(1), 39–50.
4. Babalola, Y. A. (2013). An Impact of Social Audits on Corporate Performance: Analyses of Nigerian Manufacturing Firms. Research Journal of Finance and Accounting, 4(3), 96– 101.
5. Bessong, P.K. & Tapang, A.T. (2012). Social responsibility cost and its influence on the profitability of Nigerian banks. International Journal of Financial Research, 3(4), 1-5.
6. Crowther & Aras (2008). Corporate social responsibility. David Crowther and Guler Aras Venture Publishing ApS ISBN 978-87-7681-415-1
7. Lewis, J. (Retrived 2016). How to record a donation for bookkeeping. Chron Small business accounting and bookkeeping. http://smallbusiness.chron.com/record-donation-bookkeeping-35129.html. (2017)
8. Palmer, H. J., (n,d). Corporate social responsibility and financial performance: Does it pay to be good? (Unpublished Theses. Paper 529). http://scholarship.claremont.edu /cmc_theses/529
9. Sufian, M. A. (2012). Corporate Social Responsibility disclosure in Bangladesh. Global Journals of Management and Business Research 12, 14/1. Global Journals Inc. (USA).
10. Weber, M. (2008). The business case for corporate social responsibility: A company-level
11. Measurement approach for CSR. European Management Journal 26, 247– 261. European School of Management, University of Glasgow www.elsevier.com/locate/emj.

To cite this article: Ohaka, J., Ogaluzor, O.I. (2018). Corporate Social Responsibility Accounting and the Effect of Donations on Profitability of Oil and Gas Companies in Nigeria, International Journal of Academic Research in Accounting, Finance and Management Sciences 8 (3): 265-276.