Firm Structural Characteristics and Financial Reporting Quality of Listed Deposit Money Banks in Nigeria

Abstract

The quality of financial report is very crucial as published financial reports remains, for the most part, the only means by which outside shareholders and investors keep themselves informed about the performance of the firm. In the present economic scenario, this concern for financial reporting quality becomes more acute as emerging market economies and more importantly mono economies like Nigeria face greater uncertainties as they combat the challenges of unprecedented fall in oil prices. In addition to this, the suspension of the CEO, Chairman and two other directors of Stambic IBTC bank by the Financial Reporting Council of Nigeria for filling a misleading financial statement for 2013 and 2014 has also shown that the issue of financial reporting quality cannot be overemphasized. Using secondary data from the published reports of thirteen listed deposit money banks in Nigeria for over a period of ten years between 2005 and 2014, this paper seeks to find the determinants of financial reporting quality and reports the findings of the impact of structural characteristics like age, size and level of leverage on financial reporting quality. Using prio studies as a guide, we developed a model for loan loss provisions and generated the residuals, using these residuals know as abnormal loan loss provisions as the dependent variable for the multiple regression analysis, the study did not find any evidence of significant relationship between firm age, size, leverage and financial reporting quality.

Determinants of Financial Reporting Quality : Evidence from Listed Agriculture and Natural Resources Firms in Nigeria

“…Extant literature reports varying interaction between leverage and financial disclosure quality. Fathi, (2013), Olowokure, et al (2016), Agyei-Mensah, (2012), Uwuigbe, Uwuigbe and Okorie (2015), Akhtaruddin, Hossain, Hossain and Yao (2009) did not find any statistical relationship. On the contrary, the regression result of the work of Shehu (2013), Amr (2016), Shehu and Farouk (2014), Karami and Akhgar (2014), Kim and Yang (2014) found positive significant relationship between firm leverage and financial reporting quality.…”

“…Researchers use different measures of age to compute the age of firm. While some use the date of incorporation to the year of reporting (Olowokure, Tanko and Nyor (2016) others use of listing years, which is the number of years the firm has been on the stock exchange (Haniffa & Cook, 2002;Ojeka, Mukoro & Kanu, 2015). Scholars have the liberty to choose which measure is more appropriate, depending on the objectives of their study.…”

Apakah Leverage, Ukuran Perusahaan dan Masa Jabatan Direksi Mempengaruhi Kualitas Laporan Keuangan Bank Umum Syariah?

“…Kualitas laporan keuangan mempunyai fungsi sangat penting karena laporan keuangan yang diterbitkan secara rutin merupakan satu-satunya cara dimana pemegang saham luar dan investor mendapatkan informasi tentang kinerja perusahaan (Olowokure, Tanko, & Nyor, 2016). Hal ini disebabkan oleh fakta bahwa pelaporan keuangan selalu menjadi sarana utama bagi manajemen dalam mengkomunikasikan informasi keuangan kepada pengguna luar yang berfungsi sebagai dasar untuk menilai kinerja ekonomi dan Finansia Volume 02 Nomor 02 Juli-Desember 2019 | 2 kesehatan keuangan suatu perusahaan dalam upaya untuk memantau tindakan manajemen dan dalam membuat penilaian berdasarkan informasi (Jerry & Saidu, n.d.) serta dapat menggunakan informasi tersebut dalam menilai kinerja ekonomi dan kondisi bisnis serta panduan dalam membuat keputusan ekonomi (Mbobo & Ekpo, 2016).…”

“…Selain itu, relevansi dapat dipengaruhi oleh apakah suatu informasi penting, yaitu apakah kelalaian atau penggambarannya yang salah memengaruhi keputusan ekonomi yang diambil oleh pengguna (Kythreotis, 2014). Yang kedua penyajian jujur atau Keandalan adalah apa yang meyakinkan pengguna bahwa informasi tersebut cukup bebas dari kesalahan atau bias dan bahwa itu benar-benar mewakili kondisi perusahaan (Olowokure et al, 2016) Penggunaan standar akuntansi dalam pembuatan laporan keuangan merupakan salah satu cara untuk mendapatkan laporan keuangan yang berkualitas. Saat ini standar akuntansi internasional yang digunakan adalah International Financial Reporting Standards (IFRS).…”

“…Ada beberapa proxy yang biasa digunakan untuk mengukur kualitas laporan keuangan. Proxynya antara lain manajemen laba melalui akrual (Bajra & Cadez, 2017;Choi & Pae, 2016;Mbobo & Ekpo, 2016;Surianti & Yadiati, 2017), kemampuan akrual untuk memprediksi arus kas masa depan (Chen & Gong, 2019;Choi & Pae, 2016;Kythreotis, 2014), dan conservatisme (Choi & Pae, 2016), ketepatwaktuan (Arieftiara & Utama, 2018;Susanti, 2017), kualitas laba Chen & Gong, 2019;Lin, Jiang, Tang, & He, 2015), manajemen laba dengan menggunakan Abnormal Loan Loss provision ABLL (Olowokure et al, 2016), relevansi nilai, diukur dengan nilai pasar perusahaan (Aderin & Otakefe, 2015;Khanna, 2014), biaya audit (Chen & Gong, 2019), perataan laba (Riediger, 2018), nilai prediktif absolut (Krismiaji, Aryani, & Suhardjanto, 2016), akrual Discretionary absolut (Krismiaji et al, 2016;Martínez-Ferrero, 2014) .…”