CORPORATE GOVERNANCE MECHANISMS AND FINANCIAL REPORTING IN NIGERIA

Abstract

The focus of the study is to examine the relationship between corporate governance and financial reporting quality in listed manufacturing firms in Nigeria. The study adopts a longitudinal research design. The sample consist of 31 listed manufacturing firms and secondary data covering the period from 2010-2018 was used for the study. Secondary data retrieved from annual reports of the sampled companies was used for the study. The Ordinary Least square regression technique was used for the estimation. The findings of the study reveals that reporting quality and statistically significant, (ii) the effect of board composition on financial reporting quality is negative statistically significant, (iii) the effect of board gender diversity (BGD) on financial reporting quality is negative statistically significant (iv) the effect of managerial (MOWN) on financial reporting quality is negative and statistically significant (v) the effect of Institutional Ownership is positive on financial reporting quality and statistically significant (vi) Foreign ownership (FOROWN) has a positive impact  though not statistically significant. Consequently, the study recommends that though there is yet no consensus regarding what number constitutes an optimal board size, there is the need for companies irrespective of their stage to ensure that the boards are constituted in such a way as to reflect critical stakeholder concerns which can result in more effective monitoring to improve on financial reporting quality. Also, the study recommends the need to strengthen board independence. Thirdly, the study recommends the need for companies to ensure that their audit committee’s co comprised of financial literate member and that corporate monitoring by the audit committees should also be enhanced