Enterprise Risk Management and Financial Reporting Quality: Evidence from Listed Nigerian Non-financial Firms (original) (raw)
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DOES RISK GOVERNANCE IMPROVES FINANCIAL REPORTING QUALITY OF LISTED NON-FINANCIAL FIRMS IN NIGERIA?
Gusau Journal of Accounting and Finance (GUJAF), 2021
Risk governance is beyond mere governance mechanisms such as board independence and committees but more significantly encompasses effective risk systems and policies, remuneration, performance management and the risk culture of the entity. This study integrates explores the relationship between risk governance dimensions of risk structure, culture, appetite and financial reporting quality of listed nonfinancial firms in Nigeria. The population of the study consists of all the 74 listed non-financial firms that are active on the Nigerian Stock Exchange as at 31st December, 2019. The sample is the total population for the study using census sampling technique. Secondary source of data was used and data extracted from the audited annual report and accounts of selected firms for 10 years period. Longitudinal Balanced Panel Multiple regression was used as a technique of data analysis for the study. The findings indicates that the coefficient of Risk Governance Structure is negatively and significantly determining the quality of financial reporting with a t-value of-8.350 and a probability value of 0.000 (p<0.000) which is significant at 1%. Similarly, the regression results show a negative association between Risk Culture and financial reporting quality, which is significant at 1% (p<.001). Thus, risk culture improves the quality of earnings which invariably increases financial reporting quality. Finally, the regression coefficient in respect of Risk Apatite stood at 0.430 with a t-value of 9.250, which is statistically significant at 1% (p<.000), which implies that where the risk apatite increases, the financial reporting quality of the selected firms reduces. The study concludes that risk governance plays an important role in improving the quality of financial reporting of listed non-financial firms in Nigeria. It is therefore recommended among others that shareholders should consider adhering strictly with the provision of the New Corporate Governance Codes while appointing board members so as to appoint members capable of monitoring firms risk investment by serving in board risk committee. Firm managers should also consider maintaining a good risk culture and improving risk appetite to improve financial reporting quality of listed non-financial firms in Nigeria.
CORPORATE GOVERNANCE AND FINANCIAL REPORTING QUALITY IN NIGERIA
The purpose of this paper is to investigate corporate governance and financial reporting quality in Nigeria. This research has been performed using a sample of 40 companies listed on the Nigeria Stock Exchange (NSE) from 2006 to 2015. The relationship between corporate governance mechanisms (board characteristics, audit committees, board independence, board size and growth) and financial reporting quality was observed. The results of the multiple regression analysis were statistically significant at 0.05 level. The F statistics of 3.641 shows that the results typically explained the model. The findings of the study revealed thatcorporate governance improves the financial reporting quality in Nigeria. Copyright©2017, Joseph Babatunde Akeju and Ahmed Adeshina Babatunde. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited.
Corporate Governance and Accounting Quality : Empirical Investigations from Nigeria
Journal of Policy and Development Studies, 2015
Quality decision making is based on the quality of information available to investors and other stakeholders. Financial reports published by companies serve as the major means of financial information. The quality of these reports determines the types of decisions investors make. Various and alternate corporate governance variables have been evaluated in the literature. In this study, we incorporated the variables of enterprise risk management(ERMD) and corporate governance disclosure(CGDC) reports to enhance the robustness of the corporate governance model. By using secondary data from 150 companies in Nigeria, we sought to know the relationship between corporate governance variables and accounting quality, proxied by timeliness. The data were analyzed using the Ordinary Least Square (OLS) of multiple regressions along with the descriptive statistics to obtain the mean, standard deviation, minimum and maximum values. In our findings in 2006 through 2009,results were mixed, Nevertheless, it was suggested that an average of 9 members as the Board Size be encouraged, though the code of corporate governance code is silent on this. This is in addition to having reports on ERMD and CGDC in the annual reports for stakeholders' information, investment decision and review.
Investment Management and Financial Innovations, 2019
This research empirically looked at Enterprise Risk Management impact on accounting quality of selected listed firms in the Nigerian financial sector. The study engaged the use of content analysis of the selected listed firms’ annual financial reports and corporate websites in determining the ERM disclosure index and its impact on accounting quality for a period of five years (pre-ERM period) (2007–2011) and another five years period (post-ERM period) (2013–2017). In attaining the proposed objectives, the study employed the panel Generalized Method of Moments estimator to test the hypotheses and find out the relationship between the variables. The study observed from the findings that there is no significant association between enterprise risk management and accounting quality during the pre-ERM period. This study adds to the body of knowledge in the area of corporate reporting, risk disclosure, risk management and accounting quality in emerging economies especially the Sub-Saharan ...
Corporate governance attributes and financial reporting quality in Nigeria
Zenodo (CERN European Organization for Nuclear Research), 2023
This study evaluated the effect of corporate governance attributes on financial reporting quality of listed manufacturing firms in Nigeria. The research design adopted for this study was the ex-post facto research design. Secondary data were taken from audited annual reports and accounts of sampled listed manufacturing firms on the Nigerian Exchange Group (NEG) 2021. The study adopted non-probability sampling filtering technique, using a sample of forty-two (42) manufacturing firms listed on the NEG. These listed manufacturing firms included selections from: four-agriculture; sixteen-consumer goods; seven-industrial goods; sixhealthcare; four-natural resources and five-conglomerates. Data extracted from the annual reports and accounts of these companies and were analyzed with the aid of Panel Regression using Stata version 14. From the Hierarchical Regression results, the variables of board size (Coef. = 6.2313; t = 2.88 and P-value = 0.004) and ownership concentration (Coef. = 70.2144; t = 2.22 and P-value = 0.027) have significant positive effects on timeliness of financial reporting of listed manufacturing firms in Nigeria from 2012 to 2021. These results are in line with prior expectations but are inconsistent with the stated null hypotheses, hence the null hypotheses which states that board size and ownership concentration have no significant effects on timeliness of financial reporting of listed manufacturing firms in Nigeria during the period under study are rejected. It implies that an increase in the number of board size and ownership concentration will improve the financial reporting timeliness of listed manufacturing firms in Nigeria during the period under study. The variables of board gender diversity (Coef. = .04463; t = 0.11 and P-value = 0.912) and board diligence (Coef. =-2.0632; t =-0.47 and P-value = 0.638) have no significant effects on timeliness of financial reporting of listed manufacturing firms in Nigeria from 2012 to 2021. These results are not in line with prior expectations but are consistent with the stated null hypotheses, hence the null hypotheses which states that board gender diversity and board diligence have no significant effects on timeliness of financial reporting of listed manufacturing firms in Nigeria during the period under study are retained. It also implies that an increase in the number of female members on the board and an increase in the number of board meetings will have no effect on the financial reporting timeliness of listed manufacturing firms in Nigeria during the period under study. The manufacturing sector is extremely crucial for a developing country such as Nigeria since they promote the enlargement and expansion of Nigeria's economic growth. It is therefore recommended that the number of directors on the board should be between seven (7) or eight (8) board members in order to foster faster communication, coordination and ultimately timeliness of financial reporting among listed manufacturing firms in Nigerian.
Zenodo (CERN European Organization for Nuclear Research), 2023
This study examined financial reporting quality and shareholders wealth maximization of listed consumer goods manufacturing companies in Nigeria, from 2011 to 2020. Ten consumer goods manufacturing firms quoted on the Nigeria Stock Exchange were used. Financial reporting quality was measured by discretionary accruals, earnings persistence and earnings smoothening), while shareholders' wealth maximization was measured by the return on equity. Ordinary Least Square (OLS) regression estimation technique was used with the aid of E-views 9 statistical software. The study found that earnings persistence has a significant and positive impact on shareholders' wealth maximization in listed consumer good firms in Nigeria while discretionary accruals, earnings smoothing and earnings volatility have negative and significant impact on shareholders' wealth maximization in listed consumer firms in Nigeria. The study concludes that financial reporting quality has a significant impact on shareholders wealth maximization of listed consumer goods manufacturing companies in Nigeria. The study recommends that consumer goods manufacturing firms in Nigeria should maintain competence in managing shareholders' equity in order to ensure robust returns. I. BACKGROUND OF THE STUDY Investors commit funds into investments in order to get good returns at the end of a period. Sanyaolu, Onifade and Ajulo (2017) posit that the reward investors receive for the resources they invest in a company is mainly dividend which is a function of earnings of the company. Sanyaolu and Job-Olatunji (2017) have indicated that the maximization of shareholders' wealth represents the level of profitability, managerial resource utilization competence and value creation of a firm. In the same vein, a company's financial statement is a means of providing information and enlightening the shareholders about the financial position, performance and cash flow of the firm. The financial statements are a paramount enabling instrument for shareholders investment decisions. Appolos and Ademola (2020), Asia and Ratan, (2019), and Arowosegbe and Emeni (2016) believe that shareholders' wealth maximization is a profitability index, a good measure and a valuable widely used matrix for Shareholders' wealth maximization of firms with large earnings. Habib and Jiang (2016) assert that shareholders' wealth maximization is one of the most important variable to measure the performance of a business, as investors make investment decisions based on the expectation that management would create value for the investors predicated on the accuracy of Shareholders' wealth maximization predictions and as market forecast determinant. Appolos and Ademola (2020) also argue that shareholders are always at the losing end due to dishonesty and unethical practices, accounting maneuvers with deceitful intentions and accounting fraud through the exploitation of the managers' privileged positions, which negate shareholder wealth maximization goals. Typical of the cases of corporate scandals are Xerox for improper accounting and deviation from accounting principles; WorldCom for leveraging of shares to raise debt for expansive acquisition; Enron and Arthur Anderson for lack of transparency and premeditated projection of healthy picture of performance; and Tyco for aggressive acquisition strategies and accounting frauds. Sanyaolu and Job-Olatunji (2017) admit that financial statements are subject to independent examination by appointed auditor so as to confirm whether the statement of financial performance and statement of financial position for the period show the true image of the reporting firm. The essence of the auditing process and other institutional settings www.theijbmt.com 339|Page Financial Reporting Quality and Shareholders Wealth Maximization of Listed Manufacturing Companies… such as internal control and corporate governance is to ensure that financial statement maintains high quality measured relevance, reliability, comparability, understandability, accuracy and completeness,
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