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Corporate Governance and Financial Reporting Quality in Selected Nigerian Company

Author

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  • Onuorah, Anastasia Chi-Chi

    (Delta State University)

  • Imene Oghenefegha Friday

    (Delta State University)

Abstract

This paper evaluated the level of performance of some selected companies ranging from commodities, brewery, banking, oil and gas and beverages in terms of corporate governance measure indictors on the firm quality of financial reporting in Nigeria. The data were collected from 2006 to 2015. Econometric analysis were conducted and the result suggests that the correlation among corporate governance indicators of board structure (size-BRDSZ and independence-BRDID), audit quality (audit committee size (ADCMZ), the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4), board experience (i.e. experience-BRDEX) and financial reporting quality is 93.47%. The independent variables can explain the variation in the FRQDA by 54.29%. There is overall significance among the parameters measuring financial reporting quality as discretionary accruals of firm (FRQDA). Board structure (size-BRDSZ), board experience (experience-BRDEX) and the quality of external audit (EADTQ) have positive impact on the financial reporting quality measured by the discretionary accruals of firm (FRQDA) by 16.01, 0.05 and 2.75. However, independent directors on the board of firm (independence-BRDID) and audit quality (audit committee size (ADCMZ) negatively affect financial reporting quality measured by the discretionary accruals of firm (FRQDA) as much as 0.99 and 20.01. Guarantee Trust Bank Plc. among the five selected companies of study in Nigeria has better performance of financial reporting based on board structure (size-BRDSZ) and audit committee size (ADCMZ). This revealed that there is short run relationship among Audit quality (audit committee size (ADCMZ), and the quality of external audit (EADTQ) as measured by the presence of an auditor among the big-4) and board experience (i.e. experience-BRDEX) have not granger cause FRQDA. It further recommended that greater focus on corporate governance indicators so as to bring about global standard financial reporting in the Nigerian emerging market for investment opportunity.

Suggested Citation

  • Onuorah, Anastasia Chi-Chi & Imene Oghenefegha Friday, 2016. "Corporate Governance and Financial Reporting Quality in Selected Nigerian Company," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 2(3), pages 7-16, February.
    • Handle: RePEc:mgs:ijmsba:v:2:y:2015:i:3:p:7-16
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.23.1001
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    Citations

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    Cited by:

    1. Amonboev Makhammadsidik, 2019. "Increasing the Effectiveness of Investment Management by Introducing Corporate Governance in Joint-Stock Companies," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 4(5), pages 7-12, July.
    2. Titilope Esther Olorede & Segun Abogun & Johnson Kolawole Olowookere, 2022. "Executive Compensation, Corporate Governance and Financial Reporting Quality: Evidence from listed firms in Nigeria," Istanbul Management Journal, Istanbul University Business School, vol. 0(93), pages 1-19, December.
    3. Ibrahim Emair Albawwat & Mohammad Nawaf Al harasees, 2019. "Gender Attributes of Audit Committee Members and the Quality of Financial Reports," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(3), pages 24-37, July.
    4. Basman Aldalayeen, 2017. "Does Corporate Governance Affect the Financial Performance? Analysis of Findings from Jordanian Banks," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(4), pages 123-123, March.

    More about this item

    Keywords

    Corporate; reporting; board size and structure; committee; companies; quality;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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