Cloud accounting: strategic advantage for maximising Shareholder wealth in Nigeria’s pharmaceutical sector

https://doi.org/10.35912/jgas.v5i1.2529
Published: Feb 5, 2025

Abstract:

Purpose: This study examines the effect of cloud accounting on shareholder wealth maximization among listed pharmaceutical firms in Nigeria. Specifically, this study examined the effect of cloud accounting software usage and cloud accounting software intensity on the return on equity of listed pharmaceutical firms in Nigeria.

Methods: An ex post factor research design was used in this study. A sample size of Five listed pharmaceutical firms in Nigeria were purposively sampled from a population of seven (7). Secondary data were sourced from the annual reports of firms from 2014 to 2023, covering a ten-year period. In addition to the descriptive analysis, model diagnoses such as multicollinearity, autocorrelation, heteroskedasticity, and normality tests were conducted to validate the model. Hypotheses testing was performed using estimates from robust least-squares regression at the 5% significance level.

Results: The findings indicate that while cloud accounting software usage significantly improves the return on equity of listed pharmaceutical firms in Nigeria (p-value = 0.0056), cloud accounting software intensity negatively affects the return on equity of listed pharmaceutical firms in Nigeria (p = 0.0147).

Limitations: This study’s limitation is based on the fact that the findings cannot be generalized to other sectors apart from the Nigerian pharmaceutical sector.

Contributions: Based on the findings of the study, pharmaceutical firms in Nigeria should enhance their investment in cloud accounting software by regularly training their finance teams on the effective use of these systems to maximize the benefits of cloud accounting to improve shareholder value.

Keywords:
1. Cloud Accounting
2. Shareholder Wealth Maximisation
3. Cloud Accounting Software Usage
4. Cloud Accounting Software Intensity
5. Return on Equity
Authors:
1 . Ama Kalu Ikwuo
University of Calabar, Cross River State, Nigeria
2 . Adaku Chinonyerem Ukoha
Nnamdi Azikiwe University, Awka, Anambra State, Nigeria
3 . Gilbert Ogechukwu Nworie
Ebonyi State University, Abakaliki, Ebonyi State, Nigeria
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How to Cite
Ikwuo, A. K., Ukoha, A. C., & Nworie, G. O. (2025). Cloud accounting: strategic advantage for maximising Shareholder wealth in Nigeria’s pharmaceutical sector. Journal of Governance and Accountability Studies, 5(1), 1–16. https://doi.org/10.35912/jgas.v5i1.2529
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Issue & Section
Vol. 5 No. 1 (2025): January
Articles
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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Author Biographies

Ama Kalu Ikwuo, University of Calabar, Cross River State, Nigeria

Lecturer, Department of Accounting.

Adaku Chinonyerem Ukoha, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria

Postgraduate Research Student, Department of Accountancy

References

    Abidde, M. O. (2021). Cloud Computer Based Accounting and Corporate Financial Performance: A Study of Some Listed Manufacturing Companies in Nigeria. IOSR Journal of Business and Management, 12-19.

    Al-Mutawa, B., & Al Mubarak, M. M. S. (2023). Impact of cloud computing as a digital technology on SMEs sustainability. Competitiveness Review: An International Business Journal, 34(1), 72-91.

    Barney, J. B. (1996). The resource-based theory of the firm. Organization science, 7(5), 469-469.

    Barney, J. B., Ketchen Jr, D. J., & Wright, M. (2021). Resource-based theory and the value creation framework. Journal of management, 47(7), 1936-1955.

    Chen, X., Guo, M., & Shangguan, W. (2022). Estimating the impact of cloud computing on firm performance: An empirical investigation of listed firms. Information & Management, 59(3), 103603.

    DeStefano, T., Kneller, R., & Timmis, J. (2023). Cloud computing and firm growth. Review of Economics and Statistics, 1-47.

    Gangadhara, B. (2023). CLOUD ACCOUNTING COST AND FINANCIAL ACCOMPLISHMENT OF FIRMS IN INDIA. International Journal of Multidisciplinary Engineering in Current Research, 8(7).

    Hamzah, A., Suhendar, D., & Arifin, A. Z. (2023). Factors Affecting Cloud Accounting Adoption In SMEs. Jurnal Akuntansi, 27(3), 442-464.

    Ichsani, S., & Suhardi, A. R. (2015). The effect of return on equity (ROE) and return on investment (ROI) on trading volume. Procedia-social and behavioral sciences, 211, 896-902.

    Lusy, L., Hermanto, Y. B., Panjaitan, T. W., & Widyastuti, M. (2018). Effects of current ratio and debt-to-equity ratio on return on asset and return on equity. International Journal of Business and Management Invention (IJBMI), 7(12), 31-39.

    Ma, R., Pan, X., & Suardi, S. (2024). Shareholder value maximization via corporate ESG performance: evidence from mergers and acquisitions in China. Applied economics, 56(58), 8529-8545.

    Mistry, H. K., Mavani, C., Goswami, A., & Patel, R. (2024). The impact of cloud computing and ai on industry dynamics and competition. Educational Administration: Theory and Practice, 30(7), 797-804.

    Monteiro, A., Cepêda, C., Da Silva, A. C. F., & Vale, J. (2023). The relationship between ai adoption intensity and internal control system and accounting information quality. Systems, 11(11), 536.

    Mulyani, Y. (2023). Unraveling the Relationship between Business Strategy and Shareholder Value Maximization. Advances in Applied Accounting Research, 1(3), 170-183.

    Nduokafor, C. O., Ukoh, U. M., & Nworie, G. O. (2024). Use of cloud-based accounting software: A tool for business failure prevention. International Journal of Social Sciences and Management Research, 10(2), 99-114.

    Nezami, M., Tuli, K. R., & Dutta, S. (2022). Shareholder wealth implications of software firms’ transition to cloud computing: a marketing perspective. Journal of the Academy of Marketing science, 50(3), 538-562.

    Nworie, G. O., & Okafor, T. G. (2023). Nigeria Public Manufacturing Firms adoption of Computerised Accounting System: The Firm Size and Firm Capital Turnover Effect. Journal of Global Accounting, 9(1), 324-345.

    Nworie, G. O., Okafor, T. G., & John-Akamelu, C. R. (2022). Firm-level traits and the adoption of computerised accounting information system among listed manufacturing firms in Nigeria. Journal of Global Accounting, 8(3), 128-148.

    Onifade, H. O., Shittu, S. A., Aminu, A., & Ajibola, K. T. (2023). Effect of cloud accounting characteristics on performance of listed food and beverages companies in Nigeria. Journal of Perspectives in Management–JPM, 7, e257284.

    Rawashdeh, A., Rawashdeh, B. S., & Shehadeh, E. (2023). The Determinants of Cloud Computing Vision and Its Impact on Cloud Accounting Adoption in SMBs. Human Behavior and Emerging Technologies, 2023(1), 8571227.

    Ray, L. K. S., & Ghosh, M. M. K. (2023). Return on Equity or Wealth Maximization of Enterprise–Which is Preferable to Shareholders? IBA JOURNAL OF MANAGEMENT & LEADERSHIP, 16(1), 28.

    Shuaibu, S., & Mohammed, A. M. (2023). The Effect of Earnings Management on Shareholders' Wealth Maximization from the Perspective of Money Deposit Banks in Nigeria. Recent Trends in Data Mining and Business Forecasting, 4(1), 43-49.

    Udochukwu, C. N., Okorafor, J. O., & Nwankwo, C. T. (2024). Cloud Accounting Cost and Financial Performance: A Study of Nigerian Deposit Money Banks. Journal of Interdisciplinary Research in Accounting and Finance (JIRAF), 11(1), 86-98.

    Wisdom, O., & Grace, O. (2023). Cloud accounting cost and financial performance of manufacturing firms in Nigeria. Russian Law Journal, 11(3), 3060-3068.

    Zhang, W. (2024). The application of cloud accounting in enterprise financial decision making in the era of big data. Applied Mathematics and Nonlinear Sciences, 9(1).

  1. Abidde, M. O. (2021). Cloud Computer Based Accounting and Corporate Financial Performance: A Study of Some Listed Manufacturing Companies in Nigeria. IOSR Journal of Business and Management, 12-19.
  2. Al-Mutawa, B., & Al Mubarak, M. M. S. (2023). Impact of cloud computing as a digital technology on SMEs sustainability. Competitiveness Review: An International Business Journal, 34(1), 72-91.
  3. Barney, J. B. (1996). The resource-based theory of the firm. Organization science, 7(5), 469-469.
  4. Barney, J. B., Ketchen Jr, D. J., & Wright, M. (2021). Resource-based theory and the value creation framework. Journal of management, 47(7), 1936-1955.
  5. Chen, X., Guo, M., & Shangguan, W. (2022). Estimating the impact of cloud computing on firm performance: An empirical investigation of listed firms. Information & Management, 59(3), 103603.
  6. DeStefano, T., Kneller, R., & Timmis, J. (2023). Cloud computing and firm growth. Review of Economics and Statistics, 1-47.
  7. Gangadhara, B. (2023). CLOUD ACCOUNTING COST AND FINANCIAL ACCOMPLISHMENT OF FIRMS IN INDIA. International Journal of Multidisciplinary Engineering in Current Research, 8(7).
  8. Hamzah, A., Suhendar, D., & Arifin, A. Z. (2023). Factors Affecting Cloud Accounting Adoption In SMEs. Jurnal Akuntansi, 27(3), 442-464.
  9. Ichsani, S., & Suhardi, A. R. (2015). The effect of return on equity (ROE) and return on investment (ROI) on trading volume. Procedia-social and behavioral sciences, 211, 896-902.
  10. Lusy, L., Hermanto, Y. B., Panjaitan, T. W., & Widyastuti, M. (2018). Effects of current ratio and debt-to-equity ratio on return on asset and return on equity. International Journal of Business and Management Invention (IJBMI), 7(12), 31-39.
  11. Ma, R., Pan, X., & Suardi, S. (2024). Shareholder value maximization via corporate ESG performance: evidence from mergers and acquisitions in China. Applied economics, 56(58), 8529-8545.
  12. Mistry, H. K., Mavani, C., Goswami, A., & Patel, R. (2024). The impact of cloud computing and ai on industry dynamics and competition. Educational Administration: Theory and Practice, 30(7), 797-804.
  13. Monteiro, A., Cepêda, C., Da Silva, A. C. F., & Vale, J. (2023). The relationship between ai adoption intensity and internal control system and accounting information quality. Systems, 11(11), 536.
  14. Mulyani, Y. (2023). Unraveling the Relationship between Business Strategy and Shareholder Value Maximization. Advances in Applied Accounting Research, 1(3), 170-183.
  15. Nduokafor, C. O., Ukoh, U. M., & Nworie, G. O. (2024). Use of cloud-based accounting software: A tool for business failure prevention. International Journal of Social Sciences and Management Research, 10(2), 99-114.
  16. Nezami, M., Tuli, K. R., & Dutta, S. (2022). Shareholder wealth implications of software firms’ transition to cloud computing: a marketing perspective. Journal of the Academy of Marketing science, 50(3), 538-562.
  17. Nworie, G. O., & Okafor, T. G. (2023). Nigeria Public Manufacturing Firms adoption of Computerised Accounting System: The Firm Size and Firm Capital Turnover Effect. Journal of Global Accounting, 9(1), 324-345.
  18. Nworie, G. O., Okafor, T. G., & John-Akamelu, C. R. (2022). Firm-level traits and the adoption of computerised accounting information system among listed manufacturing firms in Nigeria. Journal of Global Accounting, 8(3), 128-148.
  19. Onifade, H. O., Shittu, S. A., Aminu, A., & Ajibola, K. T. (2023). Effect of cloud accounting characteristics on performance of listed food and beverages companies in Nigeria. Journal of Perspectives in Management–JPM, 7, e257284.
  20. Rawashdeh, A., Rawashdeh, B. S., & Shehadeh, E. (2023). The Determinants of Cloud Computing Vision and Its Impact on Cloud Accounting Adoption in SMBs. Human Behavior and Emerging Technologies, 2023(1), 8571227.
  21. Ray, L. K. S., & Ghosh, M. M. K. (2023). Return on Equity or Wealth Maximization of Enterprise–Which is Preferable to Shareholders? IBA JOURNAL OF MANAGEMENT & LEADERSHIP, 16(1), 28.
  22. Shuaibu, S., & Mohammed, A. M. (2023). The Effect of Earnings Management on Shareholders' Wealth Maximization from the Perspective of Money Deposit Banks in Nigeria. Recent Trends in Data Mining and Business Forecasting, 4(1), 43-49.
  23. Udochukwu, C. N., Okorafor, J. O., & Nwankwo, C. T. (2024). Cloud Accounting Cost and Financial Performance: A Study of Nigerian Deposit Money Banks. Journal of Interdisciplinary Research in Accounting and Finance (JIRAF), 11(1), 86-98.
  24. Wisdom, O., & Grace, O. (2023). Cloud accounting cost and financial performance of manufacturing firms in Nigeria. Russian Law Journal, 11(3), 3060-3068.
  25. Zhang, W. (2024). The application of cloud accounting in enterprise financial decision making in the era of big data. Applied Mathematics and Nonlinear Sciences, 9(1).