CREATIVE ACCOUNTING, STAKEHOLDER TRUST AND OPERATIONAL PERFORMANCE OF SELECTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study investigates the relationship between creative accounting, stakeholder trust, and operational performance in selected Deposit Money Banks (DMBs) in Nigeria. Motivated by concerns over manipulative reporting practices and their implications for confidence and efficiency, the research was anchored on stakeholder theory and employed a descriptive–explanatory design. A purposive sampling technique yielded 300 respondents as the sample sizefrom selected Deposit Money Banks in Nigeria. Data were collected using structured questionnaires measured on a five-point Likert scale and analyzed with descriptive statistics, Pearson correlation, multiple regression, and mediation analysis. Findings revealed moderate engagement in creative accounting (Mean = 3.62) alongside relatively high stakeholder trust (Mean = 3.85) and operational performance (Mean = 3.91). Regression results indicated that creative accounting negatively influences operational performance (β = –0.28, p < 0.01) and stakeholder trust (β = –0.41, p < 0.01), while stakeholder trust showed a strong positive effect on operational performance (β = 0.53, p < 0.01). Mediation analysis confirmed that stakeholder trust partially offsets the adverse impact of creative accounting on performance, underscoring its stabilizing role. The study concludes that while creative accounting persists in Nigerian banks, robust governance structures and stakeholder confidence help sustain operational outcomes. It contributes empirical evidence to the accounting literature and recommends stronger regulatory oversight, ethical financial reporting, enhanced transparency, and active stakeholder engagement as strategies to safeguard performance in the banking sector.