Abstract: The paper examined a critical assessment of accounting procedures in the oil and gas sector of Nigerian economy taking NNPC and some selected oil companies in Lagos metropolis of Nigeria. The paper also determined the effectiveness and efficiency of the accounting system of this industry which is assumed will reduce the incidence of tax avoidance by oil companies. The researcher employed ex-post facto design since the data collected were already available without any manipulation to text three hypotheses. Chi-square analysis was used to analyze the data collected for the study. Findings revealed that there is a significant relationship between the effectiveness of accounting procedure in enhancing performance, accuracy and reliability of accounting records in the industry.