CASHFLOW ACCOUNTING AND FINANCIAL PERFORMANCE OF QUOTED INSURANCE COMPANIES IN NIGERIA

Abstract

This work investigates empirically cash flow accounting and financial performance of quoted insurance companies in Nigeria. Ex-post facto research design was adopted and the population of the study is twenty-two (22) insurance companies listed at the NSE as at October 2017 for a period of four years (2013-2016). Data were analyzed using Pearson Product Moment Correlation assisted by statistical package for social science (SPSS). The findings suggest that cash flow accounting factors (operating activities and Financing activities) constrain the likelihood of financial performance of quoted insurance companies in Nigeria. It was concluded that while there is likelihood of a strong positive relationship between Cash flow activities and financial performance of quoted insurance companies. The recommendations are; Corporate Financial managers should appropriately blend their Cash flow activities to earn sufficient profitability without sacrificing liquidity. Accountants and standard setters of corporate insurance companies should enhance the quality of earnings because it usually attracts attention of investors. And finally, regulatory authorities such as IFRSB, FRCN, CBN, NSE, SEC, NDIC, etc, should encourage external auditors of quoted Insurance companies to use cash flow ratios in evaluating the performance of a company before forming an independent opinion on the financial statement.