An Assessment of the Nexus Between Firm Attributes and Financial Reporting Quality in Nigeria

Abstract

This study examines the relationship between the firm attributes and financial reporting quality of listed consumer goods firms in Nigeria. The study employed secondary data retrieved from the published financial records of 12 consumer goods listed firms in Nigeria over a period of 10 years spanning 2012 to 2021. The paper adopted four independent variables as measures of firm attributes which includes firm size (FSIZE), board composition (BSIZE, profitability (PROF) and firm growth (FGROW). On the other hand, the dependent variable which is financial reporting quality was proxy using Modified Jones Model. The dataset were analyzed using the descriptive statistics, diagnostic tests and inferential statistics. The study specified a linear model which was tested using the simple regression analysis as a result of the nature of the study. The findings revealed that board composition and firm growth have significant impact on financial reporting quality of listed consumer goods firms in Nigeria. Again, firm size and profitability have insignificant relationship with financial reporting quality of listed consumer goods firms in Nigeria. The findings indicated that collectively the firm attributes measures examined in this study have significant association with financial reporting quality of listed consumer goods firms in Nigeria. Thus, the study recommended that listed consumer goods firms in Nigeria pay attention to the potential negative impact of firm size and board size on financial reporting quality. Companies should strive to establish effective internal controls, robust reporting mechanisms, and appropriate governance structures to mitigate the adverse effects of these factors.
 Keywords: Firm Attributes, Financial Reporting Quality, Profitability, Firm Growth, Firm Size.