Lean Accounting, Human Development and Operational Efficiency in Manufacturing Firms: Evidenced from Nigeria Listed Companies

Lean Accounting, Human Development and Operational Efficiency in Manufacturing Firms: Evidenced from Nigeria Listed Companies

Author by Dr. Ifayemi Olayinka

Journal/Publisher: Journal Of Taxation And Economic Development

Volume/Edition: 17

Language: English

Pages: 46 - 64

Abstract

Lean accounting is gradually receiving global recognition in research, theory, practice and its implementation. The present economic situation has made it necessary for every business to improve products’ quantity and quality by reducing waste, and thereby maximizing profitability. Thus, the studied examined the effect of lean accounting system on operational efficiency, measured by financial output and human development.

The study adopted ex-post facto research design. The population of the study comprises all listed companies on the Nigerian stock exchange. The sample size of 12 consumer goods companies were selected using purposive sampling technique. Data were collected from their annual reports for the period of twenty years (1996-2015). Pre and post estimation tests were carried out, Data Envelopment Analysis (DEA) and multiple regression models were adopted.

The result of the DEA model showed that Nestle Ltd had the highest average inefficiency score of 95% while PN had the lowest score of 61%. The other Decision Making Units (DMUs) of 7up NB, UTC, XY, Unilever, DFM, NFM, GunN, and Cadbury had 0.82, 0.83, 0.82, 0.79, 0.88, 0.89, 0.84, 0.88, 0.89, and 0.82 respectively. The result of the regression model shows that lean accounting systems have significant (P-value of F-stat is 0.031, Adjusted R2 of 71%) positive effect on operational efficiency.

In conclusion, lean accounting system has a significant positive effect on operational efficiency.. Also, lean system has a non-significant negative effect on tax paid and a non-significant positive effect on corporate social responsibility but a positive and significant effect on salary paid. The study recommended that lean accounting system should be implemented by all listed companies in Nigeria as this will improve not only their financial performance but also have a significant effect on their stakeholders (human assets).


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