Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 i Gusau Journal of Accounting and Finance (GUJAF) Vol. 3 Issue 3, October, 2022 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 ii © Department of Accounting and Finance Vol. 3 Issue 3 October, 2022 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria All Rights reserved Except for academic purposes no part or whole of this publication is allowed to be reproduced, stored in a retrieval system or transmitted in any form or by any means be it mechanical, electrical, photocopying, recording or otherwise, without prior permission of the Copyright owner. Published and Printed by: Ahmadu Bello University Press Limited, Zaria Kaduna State, Nigeria. Tel: 08065949711, 069-879121 e-mail: abupress2013@gmail.com abupress2020@yahoo.com Website: www.abupress.com.ng mailto:abupress2013@gmail.com mailto:abupress2020@yahoo.com http://www.abupress.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 iii EDITORIAL BOARD Editor-in-Chief: Prof. Shehu Usman Hassan Department of Accounting, Federal University of Kashere, Gombe State. Associate Editor: Dr. Muhammad Mustapha Bagudo Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Managing Editor: Umar Farouk Abdulkarim Department of Accounting and Finance, Federal University Gusau, Zamfara State. Editorial Board Prof.Ahmad Modu Kumshe Department of Accounting, University of Maiduguri, Borno State. Prof Ugochukwu C. Nzewi Department of Accounting, Paul University Awka, Anambra State. Prof Kabir Tahir Hamid Department of Accounting, Bayero University, Kano, Kano State. Prof. Ekoja B. Ekoja Department of Accounting, University of Jos. Prof. Clifford Ofurum Department of Accounting, University of PortHarcourt, Rivers State. Prof. Ahmad Bello Dogarawa Department of Accounting, Ahmadu Bello University Zaria. Prof. Yusuf. B. Rahman Department of Accounting, Lagos State University, Lagos Stat Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 iv Prof. Suleiman A. S. Aruwa Department of Accounting, Nasarawa State University, Keffi, Nasarawa State. Prof. Muhammad Junaidu Kurawa Department of Accounting, Bayero University Kano, Kano State. Prof. Muhammad Habibu Sabari Department of Accounting, Ahmadu Bello University, Zaria. Prof. Okpanachi Joshua Department of Accounting and Management, Nigerian Defence Academy, Kaduna. Prof. Hassan Ibrahim Department of Accounting, IBB University, Lapai, Niger State. Prof. Ifeoma Mary Okwo Department of Accounting, Enugu State University of Science and Technology, Enugu State. Prof. Muhammad Aminu Isa Department of Accounting, Bayero University, Kano, Kano State. Prof. Ahmadu Bello Department of Accounting, Ahmadu Bello University, Zaria. Prof. Musa Yelwa Abubakar Department of Accounting, Usmanu Danfodiyo University, Sokoto State. Prof. Salisu Abubakar Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Dr. Isaq Alhaji Samaila Department of Accounting, Bayero University, Kano State. Prof. Fatima Alfa Department of Accounting, University of Maiduguri, Borno State. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 v Dr. Sunusi Sa'ad Ahmad Department of Accounting, Federal University Dutse, Jigawa State. Dr. Nasiru A. Ka’oje Department of Accounting, Usmanu Danfodiyo University Sokoto State. Dr. Aminu Abdullahi Department of Accounting, Usmanu Danfodiyo University Sokoto, State. Dr. Onipe Adebenege Yahaya Department of Accounting, Nigerian Defence Academy, Kaduna State. Dr. Saidu Adamu Department of Accounting, Federal University of Kashere, Gombe State. Dr. Nasiru Yunusa Department of Accounting, Ahmadu Bello University Zaria. Dr. Aisha Nuhu Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Lawal Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Farouk Adeiza School of Business and Entrepreneurship, American University of Nigeria, Yola. Dr. Bashir Umar Farouk Department of Economics, Federal University Gusau, Zamfara State. Dr Emmanuel Omokhuale Department of Mathematics, Federal University Gusau, Zamfara. State Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 vi ADVISORY BOARD MEMBERS Prof. Kabiru Isah Dandago, Bayero University Kano,Kano State. Prof A M Bashir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Muhammad Tanko, Kaduna State University, Kaduna. Prof. Bayero A M Sabir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Aliyu Sulaiman Kantudu, Bayero University Kano, Kano State. Editorial Secretary Usman Muhammad Adam Department of Accounting and Finance, Federal University Gusau, Zamfara State. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 vii CALL FOR PAPERS The editorial board of Gusau Journal of Accounting and Finance (GUJAF) is hereby inviting authors to submit their unpublished manuscript for publication. The journal is published in two issues of April and October annually. GUJAF is a double-blind peer reviewed journal published by the Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State Nigeria The Journal accepts papers in all areas of Accounting and Finance for publication which include: Accounting Standards, Accounting Information System, Financial Reporting, Earnings Management, , Auditing and Investigation, Auditing and Standards, Public Sector Accounting and Auditing, Taxation and Revenue Administration, Corporate Governance Issues, Corporate Social Responsibility, Sustainability and Environmental Reporting Issue, Information and Communication Technology Issues, Bankruptcy Prediction, Corporate Finance, Personal Finance, Merger and Acquisitions, Capital Structure, Working Capital Management, Enterprises Risk Management, Entrepreneurship, International Business Accounting and Finance, Banking Crises, Bank’s Profitability, Risk and Insurance Issue, Islamic Finance, Conventional and Islamic Banks and so forth. GUIDELINES FOR SUBMISSION AND MANUSCRIPT FORMAT The submission language is English and must be a well-researched original manuscript that has not previously been submitted elsewhere for publication. The paper should not exceed more than 15 pages on A4 type paper in MS-word format, 1.5-line spacing, 12 Font size in Times new roman. Manuscript should be tested for plagiarism before submission, as the maximum similarity index acceptable by GUJAF is 25 percent. Furthermore, the length of a complete article should not exceed 5000 words including an abstract of not more than 250 words with a minimum of four key words immediately after the abstract. All references including in text citation and reference list, tables and figures should be in line with APA 7th Edition publication manual. Finally, manuscript should be send to our email address elfarouk105@gmail.com and a copy to our website on journals.gujaf.com.ng mailto:elfarouk105@gmail.com http://www.gujaf.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 viii PUBLICATION PROCEDURE After receiving a manuscript that is within the similarity index threshold, a confirmation email will be send together with a request to pay a review proceeding fee. At this point, the editorial board will take a decision on accepting, rejecting or making a resubmission of the manuscript based on the outcome of the double-blind peer review. Those authors whose manuscript were accepted for publication will be asked to pay a publication fee, after effecting all suggested corrections and changes made on the manuscript. All corrected papers returned within the specified time frame will be published in that issue. PAYMENT DETAILS Bank: FCMB Account Number: 7278465011 Account Name: Gusau Journal of Accounting and Finance FOR INQUIRY The Head, Department of Accounting and Finance, Federal University Gusau, Zamfara State. elfarouk105@gmail.com +2348069393824 FOR MORE INFORMATION, CONTACT The Editor-in-Chief on +2348067766435 The Associate Editor on +2348036057525 OR visit our website on www.gujaf.com.ng or journals.gujaf.com.ng mailto:elfarouk105@gmail.com mailto:05@gmail.com http://www.gujaf.com.ng/ http://www.gujaf.com.ng/ Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 ix CONTENTS Capital Structure and Firm Financial Performance of Listed Deposit Money Banks in Nigeria: Moderating Effect of Board Financial Literacy Anas Idris Abdulwahab, Hussaini Bala Ph.D, Mansur Lubabah Kwambo Ph.D, & Abubakar Adamu 1 Influence of Socialization On MSME Compliance by Mediating Understanding and Moderating Knowledge of Tax Visits Yayuk Ngesti Rahayu 17 Does International Financial Reporting Standard Narrows Audit Expectation Gap? Musa Ibrahim Dauda, Ibrahim Adagye Dauda, PhD 35 Sustainability Reporting and Financial Performance of Listed Manufacturing Firms in Nigeria Aiyesan, Olabode Olutola Ph.D 49 Firm Attributes and Financial Reporting Timeliness of Listed Consumer Goods Firms in Nigeria Akume James Terkende, Dele Ikese Karim 67 Value Relevance of Accounting Information for Listed Financial Service Firms in Nigeria Kassim Busari, Ishaya Luka Chechet Ph.D, Aliyu Ahmed Abdullahi Ph.D, & Ibrahim Mohammed Ph.D 87 Nigeria Economic Growth and Capital Market Development: Does Contributory Pension Scheme Matter? Akinwumi Ayorinde Olutimi, Toluwa Celestine Oladele Ph.D, &Adeboye Emmanuel Sanmi 101 Audit Committee and Financial Reporting Quality: The Moderating Effect of Board Independence of Listed Deposit Money Banks in Nigeria Kassim Yusha’u Shika, Mark David Kantiyok 117 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 x Determinants of Financial Performance of Listed Deposit Money Banks in Nigeria Mary Seansu Lazarus, Nurradden Usman Miko Ph.D, & Saifulahi Abdullahi Mazadu Ph.D 140 Human Resource Accounting and Profitability of Listed DepositMoney Banks in Nigeria Ahmad Adamu Ibrahim, Ahmad Rufa’I Adamu, Fatihu Mahmud Alhassan &Muhammad Iliyas Abdulsalam 158 Board Independence, Audit Effectiveness and The Quality of Reported Earnings in The Nigerian Consumer Goods Firms Isah Shittu Ph.D, Misbahu, Abubakar Muhammad 175 Impact of Capital Structure On Financial Performance of Listed Agricultural Companies in Nigeria Ahmad Muhammad Ahmad, Shehu Usman Hassan Ph.D., &Abubakar Abubakar 192 Trade Oriented Money Laundering and Era of Cybersecurity Tax Evasion in Nigeria Oluwayemi Joseph Kayode, Adewole Joseph Adeyinka Ph.D, Adewale Abass Adekunle & Kadiri Kayode Ph.D 205 Effect of Females in the Boardroom on Corporate Sustainability Reporting Salami Suleiman Ph. D, Olanrewaju Atanda Aliu Ph.D 224 Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 1 CAPITAL STRUCTURE AND FIRM FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA: MODERATING EFFECT OF BOARD FINANCIAL LITERACY Anas Idris Abdulwahab National Identity Management Commission, Kaduna, Nigeria. anasabdulwahab5@gmail.com Hussaini Bala Ph.D Department of Accounting Faculty of Administrative Sciences and Economics Tishk International University, Erbil, Kurdistan Region, Iraq. Mansur Lubabah Kwambo Ph.D Department of Accounting Kaduna State University, Kaduna, Nigeria. Abubakar Adamu Department of Accounting Kaduna State University, Kaduna, Nigeria. Abstract The purpose of this work is to examine the interaction of members of the board with financial knowledge on the association among capital structure with firm financial performance in the Nigeria DMBs. Empirical studies were reviewed to scrutinize the upshot of capital structure in connection to the performance of firms. As the result of the foregoing, this study introduces board financial literacy as a moderator variable to interact between capital structure with performance of firms. A correlational design was adopted. Population and sample size of the study consists of 13 listed DMBs on the floor of Nigeria Stock Exchange for the period 2012 to 2021. Fixed effects regression model was employed to analyse the data of the study. Diagnostic test was conducted to confirm the validity of the statistical inferences of the study. The result shows that BFL moderated the correlation involving DEFR with financial performance. Also, the result found that EFR and DEFR were not significant to the firm financial performance of DMBs in Nigeria. This work recommends that board members with financial literacy should come up with effective policy towards encouraging debt financing in their entities by effective supervision so as to enhance the overall firms’ financial performance as well as safeguarding shareholders interest. Research in future should replicate this topic in a domain other than DMBs. Keywords: equity financing ratio, debt to equity financing ratio, firm age and leverage doi.org/ 10.57233/gujaf.v3i3.177 mailto:anasabdulwahab5@gmail.com Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 2 1. Introduction It is imperative to document that firm financial performance is the major concern of every investor, stakeholders as well as the economy. Given that, the wellbeing and survival of every corporation can be traced through the firm financial performance, financial managers therefore employs the necessary policies that are related to finance in other to attend an optimum capital structure in their different corporations so as to enhance their performance (Mohammed, Gugong & Ayuba, 2022). Various studies have been conducted to examine the correlation linking capital structure and firm financial performance in the operations of businesses (Mohammed, Gugong & Ayuba, 2022; Tanko, Siyanbola, Bako & Dotun, 2021 and Oladele, Omotosho & Adeniji, 2017). Modigliani and Miller (1958) was the pioneer theory in this context, followed by (Jensen & Meckling, 1976 and Myers & Majuf, 1984) which they provide a new definition of a firm and show how their analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problems. Also, likely changes were asserted from other studies on firm financial performance of corporations involving capital structure of different sectors of the economy were (Oladele, Omotosho & Adeniji, 2017; Nikoo, 2015; Abdel-Jalil, 2014 and Nirajini, & Priya, 2013). However, despite the effort to revive and to restructure the Nigerian banking system there has been a persistent corporate distress among the listed DMBs in Nigeria over the years due to the instability in their financial performances (Abdulwahab, 2021). Also, TheGuardian.ng (2018) narrated the takeover of Skye Bank Plc by Polaris Bank Plc in 2018 as their problems emanated after it used short-term funds to buy local lender Mainstreet Bank in 2014 but failed to raise fresh cash. It had been in talks with shareholders and investors to raise capital but suspended plans after weak oil prices hit the capital markets and drove foreign investors away. Numerous studies have investigated the nexus involving capital structure with firm financial performance in different context (Oladele et al., 2017; Hassan & Muhammad, 2016; Siddik, Kabiraj & Joghee, 2016; Adesina, Michael & Adesina, 2015 and Sultan & Adam, 2015). Nevertheless, findings of these studies point out a mixed result. Particularly, Ogiriki, Andabai and Werigbelegha (2018) examined the effect of financial leverage on corporate performance of firms in Nigeria and Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 3 their result revealed a positive significant correlation. Also, Abdulla (2017) conducted a study on Capital structure in a tax-free economy in UAE. the findings of the study shown a positive significant association. Similarly, Dahiru (2016) investigated capital structure and financial performance of listed manufacturing firms in Nigeria and the result of the study found a significant positive association involving capital structure with financial performance of the firms. On the other hand, Ajibola and Wisdom (2018) examined capital structure and financial performance of listed manufacturing firms in Nigeria and the findings revealed a negative insignificant correlation with capital structure and financial performance. Also, Uremadu and Onyekachi (2018) investigated the impact of capital structure on corporate performance of consumer goods firm in Nigeria. The result documented an insignificant connection linking capital structure and the firm’s financial performance. This development gives the basis for the inclusion of a moderator variable (in line with Baron & Kenny, 1986) to explain the controversy in the reviewed literature. Thus, BFL serve as moderator connecting capital structure with firm financial performance of DMBs in Nigeria. Numbers of the directors with financial knowledge in the constitution of the board are likely to affect the entity’s effective decision making as they possessed technical financial expertise. Therefore, there is need to examine the moderating role of BFL on the nexus connecting capital structure with firm financial performance of DMBs in Nigeria. This study examines how effective capital structure can be achieved by having board financial literacy, which may significantly improve firm financial performance. Again, to the best of the researcher’s comprehension, the reviewed literatures with moderator variable were carried out in non-financial sector and foreign countries (Tanko, Siyanbola, Bako & Dotun, 2021; Javeed & Yaqub, 2017 and Juma, 2010). Thus, this current study will focus on the Nigerian banking sector, in line with its significant role towards the economic growth and sustainability through the provision of services that are financial in nature to the general public as well as different individual business corporations. The main aim of this study is to examine the moderating role of board financial literacy on the nexus among capital structure with firm financial performance of DMBs in Nigeria for the period of 2012-2021 because it is within the period that Nigerian banking sector had an acquisition of Skye Bank Plc by Polaris Bank Plc in 2018. Specific objectives of this study are as narrated below: Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 4 i. To examine the cause of equity financing on firm financial performance of DMBs in Nigeria. ii. To investigate the effect of debt to equity financing on firm financial performance of DMBs in Nigeria. iii. To examine the moderating effect of board financial literacy on the nexus between equity financing and firm financial performance of DMBs in Nigeria. iv. To examine the moderating effect of board financial literacy on the nexus between debt to equity financing and firm financial performance of DMBs in Nigeria. 2. Literature Review This section is premised on literatures on firm financial performance, equity financing, debt to equity financing and board financial literacy. Firm financial performance refers to the measurement of total financial health of business. Equity financing is the raising of capital from external sources through sale of shares of the company by a way of income retention. Debt to equity financing is termed as an investment solvency of an entity. Board financial literacy is the ability of the member of the board to understand and effectively use various financial experiences. 2.1 Equity Financing and Firm Financial Performance Basit and Irwan (2017) in their study revealed that equity ratio has an insignificant correlation with the firms’ financial performance. Conversely, Chechet and Olayiwola (2014) establish that equity financing is positively related to financial performance, using panel data through the annual reports of the listed companies under the Nigerian Stock Exchange. Also, Awunyo-Vitor and Badu (2012) studied the link between equity financing and financial performance of listed Ghanian banks for 11 years. The result documented a significant positive correlation involving equity financing with performance (financial) the firms. Velnampy and Niresh (2012) examine the nexus between equity finance and profitability and listed 10 Sri Lankan banks for the period of 8 years. Negative correlation was established with equity finance and financial performance. In view of the foregoing, this will test the below hypothesis. H01: Equity financing ratio does not significantly affect firm financial performance of DMBs in Nigeria. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 5 2.2 Debt to Equity Financing and Firm Financial Performance Uremadu and Onyekachi (2018) opined that total debt ratio to equity has a negative and insignificant effect on ROA. Also, Basit and Irwan (2017) examined the effect of capital structure on firms’ performance on Malaysian industrial sector. Debt to equity showed a negative effect on ROA of the firm. Shaba and Yaaba (2016) studied the effect of capital structure on bank profitability of deposit money banks for the period of 10 years in Nigeria. Capital Structure was measured by owners’ funds and borrowed funds while, profitability was proxies by gross earnings of the domain. Multiple linear regression result discovered a positive significant association with debt to equity financing and profitability. Oladeji, Ikpefan and Olokoyo (2015) revealed a negative effect between leverage represented by debt to equity and firm performance of the study. Amos and Francis (2014) shows that debt to total equity is positive and significantly associated with financial performance of the listed non-financial companies in Nigeria. Again, Maina and Ishmail (2014) examine the effect of debt-equity ratio on performance for the period 10 years. The result reveals that short term debt to total assets has positive significant association with financial performance of firms listed at the Nairobi. In view of the above, the below null hypothesis is formulated. H02: Debt to equity financing ratio do not have significant effect on firm financial performance of DMBs in Nigeria. 2.3 Board Financial Literacy and Firm Financial Performance Reformed USAID (2009) narrated that any SME member (manager) who is has financial knowledge are more likely to make a wise business decision towards enhancing their services, products and work in partnership with self-assurance with the suppliers. Kahveci & Wolfs (2019) and Peters, Miller & Kusyk (2010) established the nexus between board financial knowledge and firm financial performance respectively and the result reveal a statistically positive significant correlation with the firm financial performance. Similarly, Erin, Arumona & Omotayo (2019); Kahveci & Wolfs (2019); Akhtar & Liu (2018) and Peters, Miller & Kusyk (2010) documented that entities that have an independent director with accounting and finance knowledge is likely to effectively enhance the entity’s performance. They employed a multiple regression analysis gotten from the audited annual report from their respective domain from Nigerian Stock Exchange. Pereira and Filipe (2018) investigated how the quality of board members training will affect the financial performance of Portuguese banks. Sample of the study consist of 276 board members. Findings of the study show a statistical positive significant Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 6 correlation between the whole educational parameters with the financial performance of the firm. H04: Board financial literacy does not have significant impact on firm financial performance of DMBs in Nigeria. 2.4 Board Financial Literacy on Capital structure and Firm Financial Performance Liu (2011) opined that board of directors (BOD) is an essential aspect of corporate governance that is saddle with the responsibility to affect managerial decision. Board of directors is essential key indicator of corporate governance which is saddled with the task to improve the effectiveness and efficiency in every organization (Muhammad & Kurawa, 2021). Financial literacy of the board could have positive or a negative effect on a firm financial efficiency depending on the financial know how of the members constituted in the (BOD) in relation to capital structure which could have a positive impact on the firm financial performance. Liuraman and Dabari (2020) investigated the moderating effect of board quality on capital structure and financial performance of listed industrial goods in Nigeria for the period of 5 years. Pooled regression was employed to run the regress of the study. Also, result of the study found a positive significant relationship with capital structure and firm performance. Again, Iqbal and Javed (2017) asserted that corporate governance mechanism has statistically and positively improve the interaction involving capital structure with performance (financial) of Pakistan manufacturing firms. From the above assertion this study tests the below hypothesis: H05: Board financial literacy has no significant impact on the relationship between capital structure and firm financial performance of DMBs in Nigeria. Considering the existing link between board financial literacy and firm financial performance from the previous literatures, this study employs board financial literacy in order to strengthen the correlation between capital structure and firm financial performance of DMBs in Nigeria. However, as a result of the established gap from the previous studies, this study is underpinned by pecking order theory which was propounded by Myers and Majuf (1984) and supported by agency theory originated by (Berle, & Means, 1932). Pecking order theory states that firm has order of preference for capital structure for the purpose of avoiding information asymmetry between managers of the firm Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 7 and potentials investors and other stakeholders. The theory assert that companies prefer internal financing such as retained earnings to short term debt, long term debt, equity among other source of external source of finance. Also, agency theory clarifies on the association between the owner(s) of a firm and the manager(s) in any decision making which will enhance the performance of a firm. The theory deals with the agency’s problem that may result from conflict of interests either between the shareholders and managers or between the debt holders and stockholders. The agency theory also helps the relationship between principal and agent in terms of decision-making process, with respect to blends of capital structure of firm. 3. Methodology Correlational research design was employed because it describe the statistical relationship between two or more variables (Olowokure et al. 2016). The population of this paper covers the entire DMBs in Nigeria whose financial data are available on the floor of NSE for the period of 2012 to 2021. As a result of the foregoing, Polaris Bank Plc was filtered out due to the non-availability of data from 2012 to 2018. Therefore, 13 DMBs mark up the sample size of this research. Table 3: Variables Measurement and Source Variables Measurements Source Dependent Variable Firm Financial Performance Measured by an index Yahaya (2022) & (FFP) derived from return on Yahaya, Farouk, assets, earnings per share Lamidi, Yusuf and and return on equity. Dania (2015) Independent Variables Equity Financing Ratio Total equity / Total assets. Mohammed et al., (EFR) (2022) & Sultan and Adam (2015) Debt to Equity Financing Total debts/ Total equity. Mohammed et al., Ratio (DEFR) (2022) & Eniola, Adewunmi and Adewunmi (2017) Moderator Variable Board Financial Literacy Proportion of BOD Tanko et al., (2021) & (FA) members who has certificate Bala and Kumai (2015) in accounting, finance, ANAN, ACCA and ICAN Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 8 Control Variables Firm Age Measured as the number of years since listing. Abdulwahab, Bala, Kwanbo and Gwamna (2022) & Qasim (2014) Firm Size (FS) Natural log of total assets. Abdulwahab et al., (2022) & Rajha and Alslehat (2014) Leverage (LEV) Measured by the proportion of debt as a fraction of equity. Yahaya (2022) & Abdulwahab et al. (2022) Source: Generated by the Authors, 2022. The study employed a multiple linear regression, direct and moderated models respectively. Thus, the specific models are as stated below: Direct model FFPit = β0+β1EFRit+β2DEFRit+β3BFLit+4FA+5FS+6LEV+εit Moderated model FFPit=β0+β1EFRit+β2DEFRit+β3BFLit+β4EFR*BFLit+β5DEFR*BFLit+6FA+7F S+8LEV+εit Where: FFP = Firm Financial Performance EFR = Equity Financing Ratio DEFR = Debt to Equity Financing Ratio BFL = Board Financial Literacy FAGE = Firm Age FSIZ = Firm Size LEV = Leverage β0 = Constant β1 – β8 = Co-efficient of EFR, DEFR, BFL, EFR*BFL, DEFR*BFL, FA, FSIZ and LEV in both models respectively. ε = other factors that were not included by this model i = participating firms (i = 13 banks) t = time variable (t = 10 years) Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 9 4.0 Result and Discussion Table 4.1 Descriptive Statistics Variables Obs. Min Max. Mean Std. Dev. FFPI 130 0.0751 0.7458 0.4135 0.2420 EFR 130 0.0012 0.1837 0.1388 0.0652 DEFR 130 0.0236 3.0509 0.8500 1.0616 BFL 130 0.0000 0.8789 0.3104 0.2302 FA 130 5.0000 104.0000 27.7539 24.2845 FSIZ 130 2.0215 3.6958 2.8413 0.4721 LEV 130 0.0977 1.5630 0.5254 0.3834 Source: Extracted from STATA 13 Output Table 4.1 shows that firm financial performance has an average of 41.3% which spread at 24.2% having minimum and maximum average at 7.5% and 74.5% respectively. Also, EFR revealed a mean value of 0.1388 and spread at 0.0652. 0.0012 and 0.1837 represents the minimum and maximum value respectively. Again, DEFR has an average value of 0.8500 with a standard deviation of 1.0616. The minimum and maximum values are 0.0236 and 3.0509 respectively. More so, the moderator variable has a mean value that stood at 3.10% which implies that DMBs has an ineffective utilization of financial literate in the board members. The deviation of the data from the mean stood at 0.2302. The minimum and maximum values are 0.0000 and 0.8789 respectively. Table 4.2 Correlation Matrix Variables FFPI EFR DEFR BFL FA FSIZ LEV FFPI 1.0000 EFR -0.4059 1.0000 DEFR 0.0596 -0.0240 1.0000 BFL 0.0571 0.2469 0.1349 1.0000 FA -0.0689 0.1704 -0.2588 0.2565 1.0000 FSIZ -0.1263 0.0750 -0.0047 0.0200 -0.1294 1.0000 LEV 0.0350 -0.0116 0.0047 -0.0495 -0.1612 0.1111 1.0000 Source: Extracted from STATA 13 Output Table 4.2 showed a positive significant association between DEFR, BFL & LEV with FFPI of the sampled DMBs in Nigeria. Also, there is a negative significant correlation involving EFR, firm age (Control variable) and firm size (control variable) with FFPI of the sampled DMBs in Nigeria. Also, the correlations linking the independent variables are insignificant, which indicate absence of multicollinearity in the study’s model. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 10 Table 4.3 Diagnostic Test Variables VIF Tolerance Value FA 1.25 0.8002 BFL 1.18 0.8482 DEFR 1.13 0.8858 EFR 1.09 0.9188 FSIZ 1.04 0.9620 LEV 1.04 0.9644 Mean VIF 1.12 Hettest Chi2 1.29 Hettest Sig 0.2568 Hausman Prob. 0.0459 Source: Extracted from STATA 13 Output Table 4.3 found that the data of the study are homoskedastic in nature evidenced from chi2 of 1.29 along with prob. 0.2568. Thus, this study suggest that the original OLS regression is not suitable thereby leading this study to conduct fixed effects regression and random effects regression to determine which of the two (2) models stands to be suitable for this study. The hausman test revealed a prob. Chi2 of 0.0459. Hence, fixed effects regression stand as the appropriate model of this study. Also, the variable are free from multicolinearity, this is because none of the VIF of the variables is up to 6 (Gujarati, 1995). Table 4.4 Summary of Regression Results (Fixed Effects) Direct Moderated Variables Coefficients Z- value P- value Variables Coefficients P- value EFR -0.6797 -1.12 0.264 EFR*BFL 1.3657 0.457 DEFR -0.0002 -0.01 0.994 BFL 0.2330 2.44 0.016 FA 0.0074 1.09 0.278 FSIZ -0.0294 -0.66 0.509 DEFR*BFL 0.1446 0.093 LEV 0.0345 0.61 0.544 R2 0.2051 R2 0.2299 Wald Chi2 0.1663 Wald Chi2 0.1789 Prob. Chi2 0.0001 Prob. Chi2 0.0001 Source: Extracted from STATA 13 Output Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 11 Table 4.4 shows that EFR has a negative insignificant correlation with FFP of the DMBs in Nigeria evidenced from p-value of 0.264 and coefficient of -0.6797. This implies that in every N1 increase in EFR it will translate to a decrease by 67% in the FFP of the DMBs in Nigeria. Also, this outcome reveals that equity financing ratio is likely not to significantly influence the firm financial performance of DMBs in Nigeria for the period under review. Hence, the result of this model supported the formulated null hypothesis. Also, the interaction of BFL with EFR and FFP revealed a positive insignificant association. This means that in every N1 increase in EFRBFL it will translate to no effect on the FFP. This also supported the null hypothesis formulated. In addition, the findings is in consistent with the work of Basit and Irwan (2017) & Dahiru (2016) but contrary to that of (Mohammed et al., 2022; Tanko et al., 2021 and Chechet & Olayiwola, 2014). Again, table 4.4 revealed that DEFR has a negative insignificant correlation with FFP of the sampled DMBs in Nigeria evidenced from p-value of 0.994 and coefficient of 00.0002. This signifies that in every N1 increase in DEFR it will lead to no impact on FFP of the sampled DMBs in Nigeria. This signifies that debt to equity financing ratio is likely not to have a significant influence on the firm financial performance of DMBs in Nigeria for the period under review. Hence, the result supported the formulated null hypothesis. Also, the interaction of BFL with DEFR and FFP revealed a positive and statistically significant association with FFP of the sampled DMBs in Nigeria. This means that in every N1 increase in DEFRBFL it will translate to an increase by 14% on the FFP of the sampled DMBs in Nigeria. This also supported the null hypothesis formulated. In addition, the findings contradicts that of Mohammed et al., (2022) and Tanko et al. (2021) but it’s in cohort with that of (Tanko et al. 2021 & Uremadu & Onyekachi, 2018). Again, the control variables firm age, firm size and leverage shows an insignificant effect on FFP of DMBs in Nigeria. This implies that the years which the banks have been in operations, the size of the banks as well as the leverage do not improve the financial performance of DMBs in Nigeria. Lastly, the moderated model explains FFP at 23% thereby attributing 77% to error term whereas the direct relationship model explains the FFP at 21% and the remaining 79% is accounted by the random error term. 5. Conclusions and Recommendations Equity financing ratio and debt to equity financing ratio found no significant impact on FFP of DMBs in Nigeria for the period under review. Thus, the findings do not provide an effect to policy implications. On the other hand, the moderated model Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 12 of the study shows that DEFR has a positive significant effect on the FFP of DMBs. Also, DEFR displayed an important part in influencing the FFP of DMBs in Nigeria. This study again discovered a negative influence exist with equity on the overall success of the business. Moreover, this study discovered that BFL has a significant positive influence on the firms’ performance (financial) of DMBs in Nigeria. It is recommended that the board members should come up with effective policy towards encouraging debt financing in their entities with effective monitoring so as to enhance the overall firm financial performance as well as safeguarding shareholders interest. This could be through optimal capital structure by using more of debts than equity. This study calls for more studies to investigate the relationship between capital structures, board attributes (that were not captured in this study) and firm financial performance by testing data from other domain (non-financial) and for a longer period. Lastly, findings and recommendations is strictly limited to the DMBs in Nigeria. References: Abdel-Jalil, T. (2014). The impact of capital structure on the performance of the Jordanian publicly held industrial companies. Jordan Journal of Business Administration, 10(6), 390–403. Abdulla, Y. (2017). Capital structure in a tax-free economy: Evidence from UAE. International Journal of Islamic and Middle Eastern Finance and Management, 10(1), 22–37. Abdulwahab, A, I., Bala, H., Kwanbo, M, L., & Gwamna, Y, J. (2022). Corporate governance mechanisms, firm age and earnings quality of conglomerate firms in Nigeria. Polac Economics Review (PER), 2(2), 1–10. Abdulwahab, A, I. (2021). Audit committee characteristics and financial reporting quality of listed deposit money banks in Nigeria: Moderating effect of whistle blowing policy. Kaduna State University. Adesina, J, B., Michael, N, B., & Adesina, O. (2015). Capital structure and financial performance of commercial banks in Nigeria. International Journal of Business and Social Research, 5(2), 21–25. https://doi.org/10.2139/ssrn.3925685 Ajibola, A., & Wisdom, O. (2018). Capital structure and financial performance of listed manufacturing firms in Nigeria. Journal of Research in International Business and Management, 5(3), 81–89. Akhtar, S., & Liu, Y. (2018). SME managers and financial literacy; does financial Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 13 literacy really matter? Journal of Public Administration and Governance, 8(36), 353–373. https://doi.org/https://doi.org/10.5296/jpag.v 8i3.13539 Awunyo-Vitor, D., & Badu, J. (2012). Capital structure and performance of listed banks in Ghana. Global Journal of Human Social Science, 5(12), 56– 62. Bala, H., & Kumai, G, B. (2015). Board characteristics and earnings management of listed food and bevarages firms in Nigeria. International Journal of Accounting, Banking and Management, 3(3), 1–14. Baron, R, M., & Kenny, D, A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173– 1182. Basit, A., & Irwan, F, N. (2017). The impact of capital structure on firms performance: Evidence from Malaysian industrial sector a case based approach. International Journal of Accounting & Business Management, 5(2), 1–17. Berle, A, A., & Means, G, C. (1932). The modern corporation and private property. Reviews in American History, 18(4), 578–596. Chechet, I., & Olayiwola, O. (2014). Capital structure and profitability of Nigeria quoted firms. The agency cost theory perspective. American International Journal of Social Science., 5(3), 1–16. Dahiru, I. (2016). Capital structure and financial performance of listed manufacturing firms in Nigeria. Ahmadu Bello University Zaria. Eniola, O, J., Adewunmi, A, A., & Adewunmi, O, P. (2017). Impact of capital structure on the profitability of selected quoted banks in Nigeria. International Journal of Economics, Commerce and Management, 5(1), 543–552. Erin, O., Arumona, J., & Omotayo, V. (2019). Board financial education and firm performance: Evidence from the healthcare sector in Nigeria. Academy of Strategic Management Journal, 8(4), 25–36. Gujarati, D, N. (1995). Basic econometrics - Gujarati 5th edition.pdf (pp. 12–45). pp. 12–45. Hassan, S, A., & Muhammad, S, M. (2016). Effect of profitability and financial leverage on capital structure in Pakistan commercial banks. Journal of Accounting and Public Policy, 5(1), 336–342. Iqbal, M., & Javed, F. (2017). The moderating role of corporate governance on the relationship between capital structure and financial performance: Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 14 Evidence from manufacturing sector of Pakistan. International Journal of Research in Business and Social Science, 6(1), 89– 105. https://doi.org/https://doi.org/10.20525/ijrbs.v6i1.624. Javeed, A., & Yaqub, S. M. (2017). Revisiting capital structure and firm value: Moderating role of corporate governance: Evidence from Pakistan. Developing Country Studies, 7(5), 2224–2225. Jensen, M, C., & Meckling, W, H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. Juma, A, W, J. (2010). The moderating influence of corporate governance on the relationship between capital structure and the firm value of companies quoted at the Nairobi stock exchange. University of Nairobi. Kahveci, E., & Wolfs, B. (2019). Family business, firm efficiency and corporate governance relation: The case of corporate governance index firms in Turkey. Academy of Strategic Management Journal, 18(1), 1–12. Liu, S. (2011). Board governance and earnings management of Chinese listed companies. A published thesis for master of philosophy in environmental and development economics degree. Submitted to the department of econonics university of Oslo, China. Liuraman, Z., & Dabari, I, J. (2020). Moderating road of board quality on capital structure and financial performance of listed industrial goods companies in Nigeria. ATBU Journal of Accounting and Finance, 1(1), 53–65. Maina, L., & Ishmail, M. (2014). Capital structure and financial performance in Kenya: Evidence from firms listed at the Nairobi securities exchange. International Journal of Social Sciences and Entrepreneurship, 1(11), 1–14. Modigliani, F., & Miller, A. (1958). The cost of capital, corporate governance and the theory of investment. The American Economic Review, 5(2), 261–297. Mohammed, I., Gugong, B, K., & Ayuba, A. (2022). Capital structure, board Size and financial performance of listed deposit money banks in Nigeria. NDA Journal of Management Sciences Research, 2(1), 12–25. Muhammad, S., & Kurawa, J, M. (2021). Board attributes and value of listed insurance companies in Nigeria: The mediating effect of earnings quality. International Journal of Management Science and Business Administration, 8(1), 7–23. https://doi.org/10.18775/ijmsba.1849- 5664- 5419.2014.81.1001 Myers, S., & Majuf, C. (1984). Capital structure puzzle. National Bureau of Economic Research Cambridge, 5(5), 55–64. Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 15 Nikoo, S, F. (2015). Impact of capital structure on banking performance: Evidence from Tehran stock exchange. International Research Journal of Applied and Basic Sciences, 9(5), 923–936. Nirajini, A., & Priya, K, B. (2013). Impact of capital structure on financial performance of the listed trading companies in Sri Lanka. International Journal of Scientific Research Publications, 3(5), 1–9. Ogiriki, T., Andabai, P., & Werigbelegha, B. (2018). Effect of financial leverage on corporate performance of firms in Nigeria. Research Journal of Finance and Accounting, 9(4), 2–15. Oladeji, T., Ikpefan, A, O., & Olokoyo, F, O. (2015). An empirical analysis of capital structure on performance of firms in the petroleum Industry in Nigeria. Journal of Accounting and Auditing, 5(3), 1–15. Oladele, A, S., Omotosho, O., & Adeniji, D, S. (2017). Effect of capital structure on the performance of Nigerian listed manufacturing firms. European Journal of Business and Management, 9(7), 12–26. Olowokure, O, A., Tanko, M., & Nyor, T. (2016). Firm structural characteristics and financial reporting quality of listed deposit money banks in Nigeria. International Business Research, 9(1), 106–122. https://doi.org/10.5539/ibr.v9n1p106 Pereira, V, M, M., & Filipe, J, A, C, B. (2018). Quality of board members’ training and bank financial performance: Evidence from Portugal. International Journal of Economics and Business Administration, 6(3), 47–79. Peters, S., Miller, M., & Kusyk, S. (2010). How relevant are corporate governance and corporate social responsibility in emerging markets? Journal of Accounting and Auditing: Research & Practice, 11(4), 429–445. Qasim, A. (2014). The impact of corporate governance on firm performance: Evidence from the UAE. European Journal of Business Management, 6(22), 118–124. Rajha, S, K., & Alslehat, F, A, Z. (2014). The effect of capital structure on the performance of islamic banks. Interdisciplinary Journal of Contemporary Research in Business. Shaba, Y., & Yaaba, N. (2016). Capital structure and profitability of deposit money banks: Empirical evidence from Nigeria. European Journal of Business and Management, 8(23), 24–32. Siddik, A, N., Kabiraj, S., & Joghee, S. (2016). Impacts of capital structure on performance of banks in a developing economy: Evidence from Bangladesh. International Journal of Financial Studies\, 5(3), 21– Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 16 36. Sultan, S, A., & Adam, M, H. (2015). The effect of capital structure on profitability: An empirical analysis of listed firms in Iraq. Uropean Journal of Accounting, Auditing and Finance Research, 3(2), 61–78. Tanko, U, M., Siyanbola, A, A., Bako, P, M., & Dotun, O, V. (2021). Capital structure and firm financial performance: Moderating effect of board financial literacy in Nigerian listed non- financial companies. Journal of Accounting Research, Organization and Economics, 4(1), 48–66. https://doi.org/10.24815/jaroe.v4i1.18322 The Guardian.ng. (2018). How to curb incidence of banks’ failure in Nigeria. Uremadu, O, S., & Onyekachi, O. (2018). Impact of capital structure on corporate performance in Nigeria with special focus on consumer goods firm sector of the economy. Current Investigation on Agricultural Research., 7(3), 2–18. Velnampy, T., & Niresh, J, A. (2012). The relationship between capital structure and profitability. Global Journal of Management and Business Research, 13(12), 66–74. Yahaya, O, A., Farouk, B, K, U., Lamidi, Y, S., Yusuf, M, J., & Dania, I, S. (2015). Impact of competition on the financial performance of listed deposit money banks in Nigeria. Journal of Economics and Sustainable Development, 6(13), 52–61. Yahaya, O, A. (2022). Corporate social responsibility and financial performance: Evidence from Nigeria. International Journal of Accounting and Finance Review, 10(1), 107–117. https://doi.org/10.1142/S10944060225000xx Gusau Journal of Accounting and Finance, Vol. 3, Issue 3, October, 2022 17