ACCRUAL ACCOUNTING BASIS AND CASH FLOW FUTURE PREDICTIONS: EVIDENCE FROM QUOTED COMPANIES IN NIGERIA
Nnubia, Innocent Chukwuebuka* & Fabian C. Obiora
Department of Accountancy
Chukwuemeka Odumegwu Ojukwu University
Igbariam Campus, Anambra State, Nigeria
Email: nnubiae@yahoo.com, oniiudochiobiora@gmail.com
Corresponding author*
ABSTRACT
The study investigates the relationship between Accrual Accounting basis and Cash flow future predictions of selected quoted companies in Nigeria. Sample of 10 Nigerian firms listed on Nigerian Stock Exchange for a period of 10 years (from 2007-2016) was selected. The main type of data used in this study is secondary; sourced from the Nigerian stock exchange fact book. This study applied ex post facto research design. The data collected were analysed using Ordinary Least Square Method. The results show that for the Nigerian listed firms, Cash flow (CFO) has positively associated with accounts receivable (0.522725), accounts payable (0.823528), deferred tax liability (0.632530) and depreciation expense (0.075088).The study, therefore recommends among others that the Investors should not ignore information from current accruals, since knowledge of accounting accruals aids in predicting future cash flows over and above these firm characteristics.
Key words: Accrual Accounting Basis, Cash Flow Future Predictions, Nigeria.
