JOURNAL OF SOCIAL AND POLICY RESEARCH

CENTREE FOR DEVELOPMENT STRATEGIES IN AFRICA STUDIES

PORT HARCOURT, RIVERS STATE
NIGERIA
VOL 8 NO1 JUNE 2014

EFFECT OF SOCIAL RESPONSIBILITY ACCOUNTING ON THE PERFORMANCE OF

SELECTED COMPANIES IN RIVERS STATE, NIGERIA.
BY
OGBONNA, G.N. (PhD),
Department of Accounting
Faculty of management Sciences
University of Port Harcourt
Ogbonnagab@yahoo.com,
OJEABURU FRIDAY,
Department of Accounting
Faculty of management Sciences
University of Port Harcourt
Ojeaburuf@gmail.com
And
COTTERELL AKUROMAA BASOENE
Department of Accounting
Faculty of management Sciences
University of Port Harcourt

ABSTRACT
The research work investigated the effects of social responsibility accounting (SRA) on the
performance of firms in Rivers State of Nigeria. Three research questions and hypothesis were
1

raised. Chi-square test was adopted for the study with the use of statistical package for social
sciences (SPSS) in analyzing the data. The research was conducted using a primary data gotten
from well-structured questionnaire. The findings on the profitability of the companies shows that
social responsibility accounting can improve on the profitability of companies by increasing the
companys return on equity (ROE), earnings per share (EPS), return on capital employed
(ROCE) and also its return on investment (ROI). Corporate social responsibility accounting can
also lead to the maximization of shareholders wealth by positively affecting the long term
stability of the company. Social responsibility accounting is a tool for share price maximization
and it also improves the companys return of capital. It is concluded that, it can improve the
goodwill of company by providing conducive working environment for job satisfaction and job
security. It plays a major role in youth development which in turn reduces menace in the society,
social responsibility accounting contributes to infrastructural development with the provision of
health care facilities, water, quality education and social security; it also enhances the
relationship between company and their host communities. The researcher recommended that
firms should liaise with community authorities to identify areas or opportunity available to them
to better the lives of the people through the provision of social amenities. Firms should intensify
efforts to educate the public on their primary responsibility, various commitment to other
stakeholders and operational/financial limitations, further studies should be conducted to
establish the value in monetary terms as to how much CSRs contributes to the organizations
profitability and to the degree at which CSR programmes have impacted on the society and its
corresponding value generation for the company.

Key words: social responsibility accounting, environment accounting, sustainable development,

Nigeria,

INTRODUCTION
Social responsibility accounting started in developed countries as a result of pressures from
environmental and human rights groups, and has been known by various terms such as; social
and environmental accounting, corporate social reporting, corporate social responsibility
reporting, non-financial reporting; however, it is more common to refer to it as Social
Responsibility Accounting (SRA). It is defined as a branch of accounting that aims to define the
results of an institution or organization and its financial position from a social perspective since
companies are relevant and affect societies as a whole (Suleiman & Younis, 2013). Although
social responsibility accounting and reporting arent compulsory for businesses because there is no
law at present covering it, but companies do on their own volition report on social issues. Many
scientists argue that there is positive relationship between social responsibility reporting and companys
financial performance: KPMG survey (2011). Despite the extensive empirical studies of corporate
2

social responsibility information impact to companys reputation and financial performance, different
attitudes show the lack of consensus on the impact of corporate responsibility reporting on companys
value and financial performance. In Nigeria, many organisations in one way or the other have show
some levels of interest in their host communities but have not given the needed financial
reporting touch to these expenses which could impacted on their performance. Most of the
disclosures are done via the directors report or notes to the accounts but they are not explicitly
disclosed or made to be part of the financial statement. That is why it is necessarily important to
examine the effect of social responsibility accounting on the performance of selected companies
in Rivers State, Nigeria (Onyekwelu & Uche, 2014).

THE RESEARCH PROBLEM

Social Responsibility Accounting is predominantly considered as a western phenomenon due to the
standards, and regulations which are weak in developing countries of Africa (Chapple and Moon,
2005). Such weak standards pose considerable challenges to organization ready to practicing SRA in
developing countries of Africa including Nigeria. Todays our society has become increasingly
concerned that the impact of firms on the environment where its operate has not adequately disclose in
their annual reports of various activities that affect the society such as waste management, improper
treatment of workers, faulty production output and environmental damage or pollution (such as
emission of gas etc) by the industries as it has overtime been reported in the media. This is because
organizations are particularly more interested in the profit maximization objective to the detriment of
the society It is therefore very essential for all to realize that public outcry for increased social
responsibility will not disappear if business organizations fail to respond to the challenges these had
posed for the society as government established National Environmental Standard and Regulatory
Enforcement Agency (NESREA) for the purpose of monitoring industrial activities as they affect the
environment and prescribe necessary control measures. Therefore this study intends to examine if
social responsibility accounting have impact on the performance of companies in Nigeria.

THE PURPOSE OF THE STUDY

The main objective of this study is to examine the effect of social responsibility accounting on
performance of selected companies. Specifically, the study intend;
3

To determine the impact of social responsibility accounting on the profitability of the

companies.

To examine the effect of social responsibility accounting on shareholders wealth

maximization

To check the extent to which social responsibility accounting improves the goodwill of
companies

THE RESEARCH QUESTIONS

In order to gather sufficient and reasonable data for this work the following questions were
effectively used to guide and direct the study.

To what extend does social responsibility accounting affect the profitability of

companies?

How does social responsibility accounting impact on the maximization of shareholders

wealth?

To what degree does social responsibility accounting improve the goodwill of

companies?

RESEARCH HYPOTHESES
From the research questions, the following null hypotheses were drawn and tested in the study
H01:

Social responsibility accounting has no significant effect on the profitability of

companies
H02:

Social responsibility accounting has no significant effect on the maximization of

shareholders wealth
H03:

Social responsibility accounting has no significant effect on the goodwill of companies.

LITERATURE REVIEW
Theoretical review
Triple Bottom Line

The term TBL was coined by Elkington in 1994 and refers to fundamental aspects that
contributes to the success of a company; social, environmental and economic; To enable
success companies need to focus on other factors besides solely economic (Emelie & Lilja,
2012). This TBL is also called Triple P (people, planet, profit) and reporting within annual
reports and financial statements. Also noted is the variety in the extent and nature of the
reporting, particularly across industry sectors and between countries (Labelle et al., 2006). These
differences have been shown, however, to be unrelated to profitability, but associated with entity size
and the regulatory environment (Stanwick and Stanwick, 2006).

Global Reporting Initiative

According to Emelie & Lilja(2012),the GRI was founded in 1997 by the Coalition for
Environmentally Responsible Economies (CERES) and Tellus Institute (Sherman, 2009) and is a
network based non-profit organization come from global business, civil society, labour, academic
and professional institutions (KPMG, 2011). The GRI was created with the aim of increasing the
level of sustainability reporting to that of financial reporting strictness and comparability
(Isaksson & Steimle, 2009). The GRI is probably the most successful attempt to date, at
standardizing the reporting of social and environmental information globally (Adams and Frost,
2007).

Conceptual Framework
The Concept of Corporate Social Responsibility (CSR)
In the literature on CSR different authors described it in different ways. There is no universal
definition of CSR, organizations have framed different definitions and there are several
perceptions of the term according to the context locally and among the countries. According to
Egels (2005), the area defined by advocates of CSR increasingly covers a wide range of issues
such as plant closures, employee relations, human rights, corporate ethics, community relations
and the environment. According to Ruggie (2002), CSR is a strategy for demonstrating good
faith, social legitimacy, and a commitment that goes beyond the financial bottom line.
5

In the opposite, Frederick (1994) explained a move from Corporate Social Responsibility to
Corporate Social Responsiveness defined as the capacity of a corporation to respond to
social pressures. The World Business Council for Sustainable Development, in its
publication "Corporate Social Responsibility: making good business sense" by Holme and
Watts (2002) provided different perceptions of what CSR should mean from a number of different
societies. For example, "CSR is about capacity building for sustainable livelihoods. It respects
cultural differences and finds the business opportunities in building the skills of employees, the
community and the government.

The concept of social responsibility has very high important components of ethics that are
the guidelines going to improve the quality of life of the people in organizations and, at the
same time, provides an industrial competitive advantage for the firm and needs to be
developed as a corporate strategy of the firm focusing in the issues of social, environmental
and economics. According to Frooman (1997), the definition of what would exemplify CSR is
the following: An action by a firm, which the firm chooses to take, that substantially affects
an identifiable social stakeholders welfare. A socially responsible corporation should take
a step forward and adopt policies and business practices that go beyond the minimum legal
requirements and contribute to the welfare of its key stakeholders. CSR is viewed, then, as a
comprehensive set of policies, practices, and programs that are integrated into business
operations, supply chains, and decision-making processes throughout the company and usually
include issues related to business ethics, community investment, environmental concerns,
governance, human rights, the marketplace as well as the workplace.
Corporate Social Responsibility (CSR) is a concept whereby companies integrate social
and environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis (European Commission, 2001). Corporate Social
Responsibility (CSR) is a means of discussing the extent of obligations a business has to its
immediate society; a way of proposing policy ideas on how those obligations can be met; as
well as a tool by which the benefits to a business for meeting those obligations can be
identified (CSR Guide). CSR is also referred to as corporate or business responsibility,
corporate or business citizenship, community relations, social responsibility. It involves
6

the way organizations make business decisions, the products and services they offer, their
efforts to achieve an open and honest culture, the way they manage the social, environmental
and economic impacts of business activities and their relationships with their employees,
customers and other key stakeholders having interest in the Business and its operations.
As Warhust (2001) points out, the three major elements of CSR are product use which focuses
on contribution of industrial products which help in well-being and quality of life of the society,
business practice which focuses on good corporate governance and gives high impetus for the
environmental well-being and equity, and finally distribution of profits equitably across
different societies, in particular the host community.

Benefits and Cost of Social Responsibility

There is a big relationship between corporate social responsibility and Financial
performance: (Orlitzky, Schmidt, and Rynes, 2003) found a correlation between
social/environmental performance and financial performance.For several decades, researches
have investigated potential benefits may be achieved by business than defined their
responsibility as extending beyond of the narrow perspective of maximizing profit (Dane,
2004), improving the competitiveness of the industry. Cost benefit analysis as a very simple
level may be regarding simply as a systematic thinking about decisions making linking that
with the consequences of different courses of actions. Firms continuously make decisions that
increase their benefits. Considering that CSR is a voluntary behavior, corporations have the
option: to choice act only responsible or social responsible. Economics are the sciences of
making decisions that can represent expected benefit or expected cost. If the expected
benefits are higher than the expected cost, corporation choose this action-shareholder
oriented, being only responsible-. But this is not simple like this. Beyond of that, being
social irresponsible scenario there is a systemic view of making decisions: there is a
framework of international principles, benefit and cost are important decisions but also
corporate wealth is important. The actions are conditioned to international principles.

Corporations maximize the benefits and minimize the cost for their self and for future and
present generations. From being social responsible, an important expected benefit is ADD
value for the corporation that is represented in corporate reputations and creating value
7

thinking in present and future generation, corporations have identity, conscience-they are
responsible citizens-, their values and principles are alienated with international principles to
maximize corporate wealth. CSR is a value asset for the firms. This social responsible citizen is
perceived by various stakeholders and they react to the perceived reputation of a corporation
and social issues in general (Dane, 2004). Reactions could be viewed in terms of benefits of
cost for the wealth of the corporation: Moreover, in the market, Corporate Social Responsible
behavior has positive consequences, for instance in terms of reputation, good will, to behave
responsible is an important asset for the corporation. Also these market positives
consequences/rewards are reflected in employees and customer fidelity. According to
Mainelli, corporate rewards/positives consequences can be seeing from two perspectives:
carrots for success and freedom from sticks. Freedom from sticks includes not being subjects
to NGO attacks, not having government impositions, not being boycotted from regions of
market or not losing key employees with different ethical values and Carrots for success might
include good public relation, brand enhancement, access to contract with CSR requirements,
positive relation with NGOs or attracting higher-quality staff at lower rate (Mainelli ,2004).
Also, in commercial organizations it has been distracted that CSR increase in shareholder
value (Mainelli, 2004).

Environment Stakeholders
The environmental stakeholders are under moral and legal obligations to protect and
enhance the natural environment. They can do this by combating destructive environmental
projects; promoting environmental sustainability of natural resources, good environmental
policy/practice; striving for environmental justice and awareness. The environmental
stakeholders include the government and its regulatory Agencies, the non-governmental
organization (NGOs), Faith Based Organization (FBO), Civil Society Organization (CSO),
Community Base Organization (CBO), NESREA green corps, Industrialists and the general
public. In essence, everyone is a stakeholder in the environment. The government has a major
role to play in providing national regulatory framework for integrating development and
conservation.

Empirical Review
8

According to Suleiman & Younis (2013), previous studies on the relationship between Corporate
Social Responsibilities and organizational performance or on any other did not provide
conclusive evidence; other revealed that there is significant relationship between CSR and
organizational performance while other has contrary view. Becchetti (2007) study titled
Corporate Social Responsibility and Shareholders Value: An Event Study Analysis. After an
increase in financial scandals and repetitive losses suffered by investors. This study attempted to
compare affected companies listed in capital markets between the years 1995 2004, to those
that had adopted a more comprehensive social responsibility approach. The study has concluded
that there exists a direct relationship between a companys higher absolute revenues and its
adoption of social responsibility and vice versa. Barnea & Rubin (2005); study titled Corporate
social responsibility as a conflict between owners. This study investigated the relationship
between a companys own assessment of social responsibility and its ownership and capital
structure. The study involved 3000 major United States companies. Their results demonstrated a
negative correlation between ownership and social responsibility of a company, as social
responsibility is a point of contention between various owners. Zulkifi & Imran (2006); study
titled Realizing corporate social responsibility. A view of the accounting profession in
Malaysia. The study aimed to explore the level of awareness and knowledge accountants have
of the social responsibilities of companies; the study sample included 14 professional
accountants and obtained their views regarding the level of awareness and understanding of
social responsibility. It reached several conclusions, namely that there exists an awareness and a
general realization on the part of professional accountants of the contents, principles and primary
functions of social responsibility, in addition to the positive trend towards affirming the social
responsibility of corporations. McGuire, Sundgren & Schneewies (1988) also argued that
companies who do not take into account CSR, may not survive since they may fail to innovate.
They conjectured that design may form the basis of constructing the link between innovation and
CSR.

METHODOLOGY
Research Design
A quasi-experimental design also known as survey research method was used. According to
Baridam (2001) in a survey research, the various element of the design are not under the control
9

of the researcher. It involved gathering a sample data about a target population. From the sample,
a generalization is made about the population. The method was chosen so that the variables will
not be manipulated.

Population of the Study/ Sample Size determination

The population of the study is 110. This population is composed of the staff of
accounting/auditing department of GTBank, Diamond Bank, Uba and Eco Bank Rivers State.
This category of staff is chosen because they have a sound knowledge of the topic of the
researcher. Since the population of the study is 110, the researcher will make use of the total
population of the study as his sample size.

Method of Data Collection

The primary data was sourced through questionnaire and interview while secondary data was
gathered from scholarly journals, the internet, text books from University of Port Harcourt
library and other relevant materials. Primary data was obtained from the targeted respondents
through a carefully constructed questionnaire. The questionnaire was designed to capture the
opinions of respondent with respect to the research question bordering on effect of social
responsibility accounting on the performance of selected companies.Primary data was gathered
through a structured questionnaire which was designed using 5 point Likert formats of Strongly
Agree = 5 points, Agree = 4 points, disagree = 3 points, strongly disagree = 2 points, and undecided
= 1 point. Also Very High = 5 points, High 4= points, low = 3 points, very low = 2 points and
undecided = 1 point were used to answer section C and D while section B was open ended
questions where workers asked to choose from alternatives.

Data Analysis Techniques

The field results were organized in a data base with the statistical package for social sciences
(SPSS). The data were also analyzed with SPSS. Two types of statistical tools of the descriptive
and inferential statistics were employed in this study. Descriptive statistics involved the
description and presentation of data using frequency and percentages. Inferential statistics such
as chi-square analysis involved the use of statistical tools for the analysis of data and test of
10

hypotheses. The chi-square test is used because, it is a statistical tool commonly used to compare
observed data with expected outcome according to a specific hypothesis and this work focuses
on determining the extent to which social responsibility accounting affects the performance of
companies in Rivers State, Nigeria.
The formula of Chi-Square (2) is
2 = { (oi - ei)2 } (ix)
ei
Where
o = observed frequency
e = expected frequency
The formula for the determination of expected frequency (fe) is:
fe = frfc (x)
N
Where
fe = expected frequency
fr = total row frequency
fc = total column frequency
N = total frequency
Asy = asymptotic significance
Rule for accepting or rejecting of the null hypotheses
If the asymptotic significance value is less than the level of significance this implies that the null
hypothesis is not accepted. Hence the level of significance is 0.01.

RESULTS AND DISCUSSION OF FINDINGS

In this chapter, the researcher presents and analyses the data collected from the respondents.
ANALYSIS AND INTERPRETATION OF DATA
Table 4.1 Administration of Questionnaire
questionnaires

no

number distributed

110

100

number returned

105

95.5
11

number not returned

4.5

number discarded

4.5

number analyzed

100

90.9

Table 4.1 shows the administration of questionnaire used in this study. It shows that 90.9 percent
of the questionnaires were completely filled and returned. This forms the sample size of this
survey. About 4.5 percent were not returned while another 4.5 percent were discarded due to
errors in answering the questionnaire. Thus, 90.9 percent were analyzed.

Social responsibility accounting on the profitability (Objective one)

To examine the impact of social responsibility accounting on the profitability of these banks,
structured questions were asked:
Table 4.6: The impact of social responsibility on profitability of banks
Structured questions
Social

responsibility

SA A
accounting

significantly 33

UN

SD Total

40

12

10

100

improves the return on equity (ROE) of the company

Social

responsibility

accounting

increases

the 22

50

18

100

increases

the 12

42

10

20

16

100

on 15

38

10

29

100

170

25

60

63

400

companys earnings per share(EPS)

Social

responsibility

accounting

companys returns on capital employed (ROCE).

Social

responsibility

improves

the

return

investment (ROI) of the bank.

Total

82

To satisfy the quest of objective one, four questions were designed to elicit relevant information
from the respondents. These questions were listed out in Table 4.6 above. Their responses were
shown as categorized in a five likert scale. To determine the impact of social responsibility on
profitability of these banks descriptive analysis was used.

Table 4.7: Result of objective one

12

Descriptive Statistics

Average responses

Mean

Std. Deviation

Minimum

Maximum

100

3.3700

1.29025

1.00

5.00

Table 4.8: Frequencies

average responses
Observed N

Expected N

Residual

1.00

5.9

2.1

1.25

5.9

-3.9

1.50

5.9

.1

1.75

5.9

.1

2.00

5.9

-1.9

2.25

5.9

-4.9

2.50

5.9

-4.9

2.75

5.9

-4.9

3.00

5.9

1.1

3.25

5.9

-2.9

3.50

5.9

1.1

3.75

5.9

-4.9

4.00

20

5.9

14.1

4.25

11

5.9

5.1

4.50

5.9

1.1

4.75

5.9

-2.9

5.00

12

5.9

6.1

Total

100

Table 4.9: Test Statistics

Average responses
Chi-Square

68.300a
13

Df

16

Asymp. Sig.

.000

a. 0 cells (.0%) have expected frequencies less than 5. The minimum expected cell frequency is 5.9.

Discussion:
From the Table 4.7, the mean value of total responses is 3.37 and the standard deviation is 1.290.
The minimum rate of the likert scale is 1 while the maximum rate is 5. The test statistics
indicated a chi square value of 68.3 with 16 degree of freedom. The asymp. Sig value is 0.000
which is less than 0.01 level of significant. This implies that there effect of social responsibility
accounting on profitability of these banks at 0.01 level.
This is further supported by the percentage of responses in the survey in Table 4.6. Thus from
the first question, 33 (33 percent) respondents strongly agreed that social responsibility
accounting significantly improves the return on equity of the banks. 40 (40 percent) respondents
ticked agree. Only 5 (5 percent) respondents were undecided. However, 12 (12 percent)
respondents said they disagreed that social responsibility accounting significantly improves the
return on equity of these bank. This was supported by 10 (10 percent) respondents who strongly
disagreed. The second question pooled a total number of 22 (22 percent) strongly agreed
respondents who affirmed that social responsibility accounting increases the companys earnings
per share (EPS). This was supported by 50 (50 percent) respondents who also agreed to that. 2 (2
percent) respondents were mute while 18 and 8 (18 and 8 percents) respondents disagreed and
strongly disagreed to it respectively. The responses from the third question indicated that a total
of 54 (54 percent) respondents supported the fact that social responsibility accounting increases
the companys returns on capital employed (ROCE). 36 (36 percent) respondents said no to that
fact while 10 percent respondents were undecided. The fourth question posited that 15 (15
percent) respondents strongly agreed that social responsibility improves the return on investment
(ROI) of the bank. This is supported by 38 (38 percent) respondents. Again 8 (8 percent)
respondents did not comment on that while 10 percent disagreed with 29 strongly disagreed
respondents. In conclusion drawn from this survey, a greater average percent of respondent
concurred that social responsibility accounting has a positive impact on profitability of the banks.

Social responsibility on shareholders wealth maximization (objective two)

14

To examine the effect of social responsibility accounting on shareholders wealth maximization in

the study area, four structured questions were used to satisfy objective two.

Table 4.10: Result of social responsibility on shareholders wealth maximization

Structured questions

SA

UN

SD Total

Corporate Social responsibility positively affects the 41

20

32

100

40

11

100

40

13

20

100

long term stability of the company

Corporate Social responsibility accounting projects 38
is an alternative for corporate wealth maximization.
Social responsibility accounting projects improves 22
share price maximization.
Social responsibility improves return on capital

25

34

10

29

100

Total

126

134

12

66

62

400

Research objective two, also uses four responses questions to examine the effect of social
responsibility on shareholders wealth maximization. The responses and frequencies of the
respondents were shown in Table 4.10 above. Their responses were also rated in a five likert
scale.

Table 4.11: Result of objective two

Descriptive Statistics

Average responses

Mean

Std. Deviation

Minimum

Maximum

100

3.4900

1.38349

1.00

5.00

Table 4.12: Chi-Square Test result

Frequencies
Observed N

Expected N

Residual

1.00

6.7

-2.7

1.25

6.7

-1.7

1.50

11

6.7

4.3
15

2.00

6.7

-4.7

2.25

6.7

.3

2.50

6.7

-2.7

2.75

6.7

-3.7

3.00

6.7

-4.7

3.25

6.7

-5.7

3.75

6.7

-4.7

4.00

18

6.7

11.3

4.25

6.7

-3.7

4.50

13

6.7

6.3

4.75

6.7

-3.7

5.00

22

6.7

15.3

Total

100

Table 4.13: Test Statistics

Average
Chi-Square

86.600a

Df

14

Asymp. Sig.

.000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell frequency is
6.7.
Discussion:
From the Table 4.11, the mean value of total responses of objective two is 3.49 and the standard
deviation is 1.38. The minimum rate of the likert scale is 1 while the maximum rate is 5. The test
statistics indicated a chi square value of 86.6 with 14 degree of freedom. The asymp. Sig. value
is 0.000 which is less than 0.01 level of significant. This implies that social responsibility
accounting affects shareholders wealth maximization of these banks at 0.01 level.
Validating this result is the frequency of respondents according to the questions asked by the
researcher (See Table 4.10). Thus, from the first question in Table 4.10, the question corporate
social responsibility positively affects the long term stability of the bank was asked. 41 (41
percent) respondents strongly agreed that social responsibility accounting affects shareholders
16

wealth maximization of the banks. 20 (20 percent) respondents ticked agree. Only 3 (3
percent) respondents were undecided. However, 32 (32 percent) respondents said they disagreed
that social responsibility accounting affects shareholders wealth maximization of these banks.
This was supported by 4 (4 percent) respondents who strongly disagreed to that fact. The second
question had a total number of 38 (38 percent) strongly agreed respondents who affirmed that
corporate social responsibility accounting projects is an alternative for corporate wealth
maximization. This was supported by 40 (40 percent) respondents. 2 (2 percent) respondents
were mute while 11 and 9 (11 and 9 percents) respondents disagreed and strongly disagreed to it
respectively. The responses from the third question social responsibility accounting projects
improves share price maximization indicated that a total of 22 (22 percent) respondents strongly
agreed to the fact that social responsibility accounting projects improves share price
maximization. 13 and 20 (13 and 20 percent) respondents said no to that fact while 5 percent
respondents were undecided. The fourth question showed that 25 (25 percent) respondents
strongly agreed that Social responsibility improves return on capital of the bank. This is
supported by 34 (34 percent) respondents. Again 2 (2 percent) respondents did not comment on
that while 10 percent disagreed with 29 strongly disagreed respondents. In conclusion drawn
from this survey, a greater average percent of respondents concurred that social responsibility
affects shareholders wealth maximization.

Social responsibility accounting on goodwill of the banks (objective three)

To examine the extent to which social responsibility account improves the goodwill of these
banks in the study area, four structured questions were also used.

Table 4.14: Result of Social responsibility accounting on goodwill of the banks

Structured questions

SA

UN

SD Total

Corporate social responsibility provides conducive 21

40

12

20

100

35

28

17

100

work environment, job satisfaction and job security to

employees
Corporate social responsibility plays a major role in 15
youth development which in turn reduces menace in
17

the society
Corporate

social

responsibility

contributes

to 27

18

30

20

100

20

10

20

100

113

28

88

64

400

infrastructural developments with the provision of

health care facilities, water, quality education and
social security
Corporate

social

relationship

responsibility

between

enhances

company and

their

the 44
host

communities.
Total

107

Objective three uses four responses questions to examine the extent to which social
responsibility account improves the goodwill of banks. The responses and frequencies of the
respondents were shown in Table 4.14 above. Their responses were also rated in a five likert
scale.
Table 4.15: Result of objective three
Descriptive Statistics

Ave

Mean

Std. Deviation

Minimum

Maximum

100

3.2775

1.38758

1.00

5.00

Table 4.16: Chi-Square Test Result

Frequencies
Observed N

Expected N

Residual

1.00

6.7

.3

1.25

10

6.7

3.3

1.50

6.7

-3.7

2.00

6.7

.3

2.25

6.7

-3.7

2.50

6.7

-.7

2.75

6.7

-3.7

3.00

6.7

-.7
18

3.25

6.7

-1.7

3.75

6.7

-1.7

4.00

6.7

-5.7

4.25

17

6.7

10.3

4.50

6.7

-.7

4.75

6.7

-.7

5.00

15

6.7

8.3

Total

100

Table 4.17: Test Statistics

Average responses
Chi-Square

40.100a

Df

14

Asymp. Sig.

.000

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum expected cell
frequency is 6.7.
Discussion:
From the Table 4.15, the mean value of total responses of objective three is 3.278 and the
standard deviation is 1.387. The minimum rate of the likert scale is 1 while the maximum rate is
5. The test statistics indicated a chi square value of 40.1 with 14 degree of freedom. The asymp.
Sig. value is 0.000 which is less than 0.01 level of significant. This implies that social
responsibility accounting improves the goodwill of these banks at 0.01 level of significant.
Furthermore, this result was supported by the result of the frequency of respondents according to
the questions asked by the researcher (See Table 4.14). The first question in Table 4.14 showed
that of 21 (21 percent) respondents strongly agreed that corporate social responsibility provides
conducive work environment, job satisfaction and job security to employees. 40 (40 percent)
respondents also agreed to that fact. 12 (12 percent) respondents were undecided. However, 20
(20 percent) respondents said they disagreed that corporate social responsibility provides
conducive work environment, job satisfaction and job security to employees of these banks. This
was supported by 7 (7 percent) respondents who strongly disagreed to that fact. The second
19

question had a total number of 15 (15 percent) strongly agreed respondents who affirmed that
corporate social responsibility provides conducive work environment, job satisfaction and job
security to employees. This was supported by 35 (35 percent) respondents. 5 (5 percent)
respondents were mute while 28 and 17 (28 and 17 percents) respondents disagreed and strongly
disagreed to it respectively. The responses from the third question corporate social
responsibility contributes to infrastructural developments with the provision of health care
facilities, water, quality education and social security indicated that a total of 27 (27 percent)
respondents strongly agreed to the fact that corporate social responsibility contributes to
infrastructural developments with the provision of health care facilities, water, quality education
and social security. 30 and 20 (30 and 20 percent) respondents said no to that fact while 5
percent respondents were undecided. The fourth question showed that 44 (44 percent)
respondents strongly agreed to it. This is supported by 20 (20 percent) respondents. Again 6 (6
percent) respondents did not comment on that while 10 percent disagreed with 20 strongly
disagreed respondents.

Test of Hypotheses
These research hypotheses were tested using the result of chi square analysis of the research
objectives.
Hypothesis one:
H0: Social responsibility accounting has no significant effect on the profitability of banks.
This hypothesis was tested with the result of chi square analysis in Table 4.9. From the result, the
chi square value is 63.3 with 16 degrees of freedom. The Asymp. Sig. value is 0.000 which is
less than 0.01 level of significance. This indicated a significant effect of social responsibility
accounting on profitability of banks. We therefore reject the null hypothesis in favour of the
alternative and conclude that social responsibility accounting has a significant effect on the
profitability of banks.
Hypothesis two:
H0: Social responsibility accounting has no significant effect on the maximization of
shareholders wealth.
This hypothesis was also tested with the result of chi square analysis in Table 4.13. From the
result, the chi square value is 86.6 with 14 degrees of freedom. The Asymp. Sig. value is 0.000
20

which is less than 0.01 level of significance. This suggested a statistically significant effect of
social responsibility accounting on the maximization of shareholders wealth of banks. We
therefore reject the null hypothesis in favour of the alternative and conclude that Social
responsibility accounting has no significant effect on the maximization of shareholders wealth in
banks.
Hypothesis three:
H0: Social responsibility accounting has no significant effect on the goodwill of banks.
Hypothesis three was tested with the result of chi square analysis in Table 4.17. From the result,
the chi square value is 40 with 14 degrees of freedom. The Asymp. Sig. value is 0.000 which is
less than 0.01 level of significance. This indicated a significant effect of social responsibility
accounting on the goodwill of banks. We therefore reject the null hypothesis in favour of the
alternative and conclude that Social responsibility accounting has a significant effect on the
goodwill of banks.

21

CONCLUSION AND RECOMMENDATION

This study concludes that profitable organizations in Nigeria do not invest much in corporate social responsibilities
and this has tendency to threaten their long run existence.
This section recommends measures to be considered by academia, corporate organization and
stakeholders as well as customers so long as corporate social responsibility is concerned. CSR
deserves greater attention and more commitment from corporate organizations in that it
guarantees other benefits other than just profits. This offers an opportunity to the corporate world
to think out of the box and explore other potentially viable areas to improve the company profits
portfolio. A corporate organization stands to gain over a period of time some leverages other that
just products and services they render to the society. CSR projects should be well structured and
implemented to have maximum impact. This would enhance the well-being of the beneficiaries.
From the survey it revealed that some customers or inhabitants of a community are not aware of
any CSR programme ongoing. Mostly they are unable to connect with the results of the
programme. It tends out that the community expectations are somewhat different form the
corporate organization. Organizations could liaise with community authorities to identify areas
or opportunities available to them to better the lives of the people through the provision of some
social amenities. This will go a long way to improve the general living standards of the people.
Corporate organizations should intensify efforts to educate the public on their primary
responsibilities, various commitments to other stakeholders and operational/financial limitations.
By doing so, the public will begin to show understanding and appreciation of the efforts and
contributions of such organizations. In most instances if the customers or the people in the
community are involved, monitoring becomes feasible and measurable. Corporate organization
should also involve the community in the planning, formulation, implementation and evaluation
of CSR projects. This will eliminate stakeholder conflicts that may arise in some societies.
Governments and local authorities should explore the areas where a certain amount of tax will be
used by the organization to undertake community based projects such as schools, electricity,
clean water, jobs and income generating activities. This can be in a form of tax exemptions
granted to these organizations. This will make the corporate organization be more responsible in
the area of work and contribute significantly to national development. For academic and industry
discussions I recommend that further study should be conducted to establish the real value in
monetary terms how much CSRs contribute to the organizations profitability. Also further
22

research should be conducted to quantify how much or to what degree these CSR programmes
have impacted on the society and its corresponding value generation for the company.

Policy Suggestions.
Though, in Nigeria social responsibility is encouraged in achieving greater firms performance, but organizations
in the country have not really engaged in Corporate Social Responsibility (CRS) which have implications for the
survival of these firms. This paper therefore offers the following policy suggestions on how firms can improve on
their CSR to ensure greater and better performance. Policy framework should be design for corporate social
responsibilities in Nigeria by the government and ensure compliance by setting mechanisms and institutions for
the implementation of CSR. Companies in Nigeria particularly the profitable one should give greater priority to
CSR. This has the tendency to assist them to survive and maintain their profitability. Attention should be given to
social accounting and social costs by firms in Nigeria.

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