REASSESSING THE INFLUENCE OF ACCOUNTING PRACTICES ON THE OPERATIONAL PERFORMANCE OF OIL AND GAS FIRMS IN THE NIGER DELTA

Abstract

This research examines how accounting practices influence the performance of oil and gas firms in Nigeria’s Niger Delta. In response to growing calls for financial transparency and accountability from stakeholders, the study assesses the roles of financial reporting standards, cost accounting systems, and internal control mechanisms in shaping performance outcomes such as profitability, efficiency, and financial sustainability. A descriptive survey approach was employed, with structured questionnaires distributed to 200 accounting practitioners across 20 oil and gas companies. Out of these, 178 valid responses were analyzed using correlation and multiple regression methods. Results indicate a strong positive link between accounting practices and organizational performance. Among the predictors, internal control mechanisms exerted the greatest influence (β = 0.409, p < 0.01), followed by financial reporting standards (β = 0.316, p < 0.01), and cost accounting systems (β = 0.241, p < 0.01). The regression model accounted for 57.4% of the variance in performance (R² = 0.574), underscoring the importance of effective accounting systems in the capital-intensive and high-risk oil and gas industry. The study concludes that well-structured accounting frameworks foster transparency, enhance cost management, and build financial resilience. It recommends that firms strengthen internal control structures, adhere strictly to International Financial Reporting Standards (IFRS), and adopt modern cost accounting approaches. Furthermore, regulatory authorities are urged to enforce compliance and promote capacity development to ensure good governance and sustainable growth in the sector.