PETROLEUM ACCOUNTING PRACTICE AND VARIABILITY OF EARNINGS IN NIGERIAN OIL AND GAS SECTOR

Abstract

The work investigated accounting practice and earnings variability in the Nigerian oil and gas industry. The specific objective was to determine the effect of full cost and successful efforts accounting on earnings variability. Secondary data was sourced from the director’s reports of annual financial statements for the sampled companies studied. The ex-post facto research design was adopted to determine the effect for 8 oil and gas companies purposively selected for the period of 2006-2023. The panel regression model estimation technique was employed using the STATA computer software version 21.0 for statistical analysis. Findings revealed that full cost accounting had a negative significant effect on earnings variability while successful efforts accounting had a positive insignificant effect on earnings variability. It was recommended that oil companies operating in Nigeria should adopt full cost accounting for their operations and practice.