Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 206

Full Length Research Paper

Has tax and accounting relationship come to nothing? An investigation into the decision usefulness of financial information disclosure

Koholga Ormin
  • Koholga Ormin
  • Department of Accounting, Faculty of Social and Management Sciences, Adamawa State University, Mubi, Nigeria.
  • Google Scholar
Bashir Tijjani
  • Bashir Tijjani
  • Department of Accounting, College of Business Administration, Imam AbdulRahman bin Faisal University, Dammam, Saudi Arabia.
  • Google Scholar

  •  Received: 28 September 2020
  •  Published: 31 October 2020


This paper investigates the decision usefulness of financial information disclosure to the Nigeria tax authority in discharging its tax assessment and collection responsibility. The paper is built on the notion that the long relationship and influence of taxation on accounting should in particular promote decision usefulness information to the tax authority. Thirteen tax themes were developed whose reflection was checked in the financial reports of firms in the Nigerian banking industry spanning a period of fifteen years (2004-2018). The data generated were analysed using Decision Usefulness Index and descriptive statistics. The computed overall Decision Usefulness Index of 53.85% shows that financial information disclosure in the industry is not significantly decision useful to the tax authority. Further, an analysis of the separate themes reveals that their reflection in the financial reports could not be traced to the relationship and influence of tax on accounting but other factors. The paper concludes that the tax authority requires decision useful financial information in order to fairly conduct tax assessment and collection in the economy. It is therefore recommended that a section in the financial reports of listed firms in Nigerian should be devoted to make disclosure of the themes highlighted in this work. Other countries where disconnect exists between tax and accounting rules are advised to follow in this light.
Key words: Decision usefulness, financial information, tax authority, accounting, tax, tax approach to accounting thought.