Financial reporting quality and share values of quoted non-financial firms in Nigeria.
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Date
2019
Authors
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Journal ISSN
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Publisher
Management and Accounting,Obafemi Awolowo University
Abstract
The study examined the level of compliance with financial reporting standards of quoted non-financial firms in Nigeria and examined the extent of financial reporting quality among the firms. It also determined the factors influencing financial reporting quality of quoted non-financial firms and investigated the impact of financial reporting quality on share values of the quoted non-financial firms in Nigeria. These were with a view to determining the effect of financial reporting quality on the firms’ value of quoted non-financial firms between 2002 and 2017.
The study employed secondary data. The population of this study was 176 quoted non-financial firms listed on the Nigeria Stock Exchange. Fifty firms were purposively selected based on the availability of complete financial information for the sampled period. Data on cashflow accrual ratio, statements of financial position accrual ratio as proxies of financial reporting quality, firms’ size, auditors’ type, share values, board size, leverage, audit committee size, age and firms’ liquidity were sourced from the audited annual financial report of the firms and factbook of Nigeria Stock Exchange. Data collected were analysed using percentages fixed effect model, random effect model and pooled OLS method.
The results showed that the compliance of firms had been increasing over the years with Income Tax (IAS 12) having the highest level of compliance of 100% among the six sampled standards. Also, results on the extent of financial reporting quality established that the level of manipulation of financial statement had been reducing every year and it had been reduced to 0% in both years 2016 and 2017 respectively. Furthermore, results revealed that both leverage and size of the firm (t = -0.3412, p > 0.05; t = 0.1325, p > 0.05) respectively, had no significant impact on the financial reporting quality of quoted non-financial firms in Nigeria. Finally, result showed that the financial reporting quality had significant positive effect on the share value of firms (t = 2.1385, p < 0.05).
The study concluded that financial reporting quality has a positive impact on the market value of quoted non-financial firms in Nigeria.
Description
xii,215p
Keywords
Finance, Financial reporting, Quality and share values, Financial firms, Non-financial firm