Environmental Accounting and Value Relevance of Accounting Information: Time Series Evidence from Nigeria Commercial Banks

Abstract

This paper examined the relationship between environmental accounting and value relevance of accounting information of commercial banks in Nigeria.Time series data of the variables used in the research was collected from financial statement of the commercial banks.  The study had equity prices and earnings per share as the function of cost of donations, cost of wages and salaries, cost of environmental expenditure and cost of human resource development. The Ordinary Least Square (OLS) method of data analysis with multiple regressions was used in the study.  In determining the long-run relationship, stationary and causal relationship that exists among the variables, cointegration, Augmented Fuller Unit Root and Pair wise Causality was used.  The static regression result found that the independents variables have positive relationship with the dependent variables excerpt cost of human capital development. The cointegration test revealed at least two cointegrating equation, the stationarity test revealed that the variables are stationary at level while the granger causality test proved no directional relationship. The study conclude that environmental accounting have significant relationship with value relevance of accounting information in Nigeria commercial banks. We recommend that all environmental cost should properly be reported and accountants should ensure well accountability of human capital development.