OKAFOR, Victor Ikechukwu
Department of Accounting
Michael Okpara University of Agriculture, Umudike
vi.okafor@mouau.edu.ng
EGIYI, Modesta Amaka
Department of Accountancy
Godfrey Okoye University, Enugu
megiyi@gouni.edu.ng
ABSTRACT
The objective of this study was to examine the effect of accounting estimates on financial performance of
listed agricultural companies in Nigeria. The study adopted an ex post factor research design. Data for
analysis was gathered from 4 out of 5 listed agricultural companies from 2011 – 2020, using purposive
sampling. The secondary data gathered, was analyzed using pooled multiple regression. The regression
result show a very weak effect of provision for bad debt, provision for employee benefits on profit after tax
at 15.9%. The R2 stood at 2.5%. The test of hypotheses revealed that provision for bad debt has negative
insignificant effect on profit after tax of listed agricultural companies in Nigeria while, provision for
employee benefits has positive insignificant effect on profit after tax of listed agricultural companies in
Nigeria. The study thus recommends that proper estimates should be made accurately in other to capture
actual bad debt which serves as incurred burden on the company so as to make plans that will shield such
burden against the profit of the companies. Also, Companies should be more focused on their estimates on
employees’ benefits since it signals employee motivation. This will enable companies make right welfare
policies with regards to estimates made on employee benefits.
Keywords: Accounting estimates, profit after tax provision for bad debt, provision for employee benefits