Advances in Consumer Research
Issue 1 : 731-738
Original Article
Detecting Financial Manipulations Of Nigerian Electricity Distribution Companies Using The Altman Z-Score Model
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1
Department of Accounting, Nile University of Nigeria, Abuja
2
Accounting Department, Igbinedion University, Okada, Edo State, Nigeria
Abstract

The study examines the detection of financial distress of Nigerian DisCos using the Altman Z-score model. An ex post facto research design was adopted for the study to assess the effectiveness and adequacy of the independent variables of the Altman Z-Score model in influencing the result of the dependent variable, regardless of the direction it is skewed, which is a determinant of whether a firm could be classified as being engaged in fraudulent financial statement practices or not. The study’s sample is drawn from the financial statements of the 11 successor companies from 2014 to 2023, available on their respective websites. A panel regression model was used in testing the hypotheses. The findings show that the Altman Z-score model effectively detects financial statement manipulations in DisCos, and there is a significant correlation between the model's independent variables and the detection of financial distress, leading to the conclusion that the Altman Z-score model is a reliable and efficient method for detecting an organisation's financial distress. The study recommended that, by applying the Altman Z-score model and considering its limitations, stakeholders can make more informed decisions and take proactive measures to mitigate financial distress

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Volume 3, Issue 1
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