OKHIRIA, Vincent Omozojie, PhD1 OBIGBEMI, Imoleayo Fokeye, PhD2
1,2Department of Accounting, University of Lagos, Akoka, Yaba, Lagos, Nigeria
Corresponding Author: okhiriavincent@yahoo.com +234901808078. iobigbemi@unilag.edu.ng +2348035939951
ABSTRACT
Management of any entity often abuses related party transactions (RTP); which often lead to poor performance of that entity. RPT were reminiscence in the saga of Enron, WorldCom, Parmalat, and so forth. Hence, the main objective of this study was to examine the effect of related party transactions on performance of Consumer Goods Companies in Nigeria. Consumer Goods Companies in Nigeria is the population of study, while Consumer Goods Manufacturing Companies listed on the Nigeria Exchange (NGX) Limited (twenty-one in number) were used as the sample size. Longitudinal research design was employed on a sample of twenty-one (21) Consumer Goods Manufacturing Companies listed on the Nigerian Exchange Limited (NGX) for a period of five (5) years (2019-2024). Secondary data were obtained from the financial statements of the companies. Panel regression techniques of estimation was used in the analysis. The data analysis was carried out using Statistical Packages for Social Science (SPSS). The findings reveal that there is no positive and significant relationship between RPT (receivables, payables and loans to directors) and the performance of consumer goods companies in Nigeria. The conclusion suggests that related party transactions between the parent company and its subsidiary do not have a significant impact on the company’s performance. It was however, recommended that regulators should consider additional disclosure requirements that will enhance transparency and accountability regarding related party transactions.
Keywords: :related party, related party transactions, receivables, payables, revenue, net profit margin, price/earnings ratios.