EFFECT OF FIRM CHARACTERISTICS ON FINANCIAL REPORTING QUALITY OF LISTED FOOD AND BEVERAGES FIRMS IN NIGERIA

Author: Junaid, Hauwa Sanusi

Supervisors: Hassan Ibrahim and Salisu Abubakar

Financial reporting is a hub of capital market as accounting information remain the most vital variable being used by the users of accounting information for their various decisions. Although financial reports are prepared based on accounting concepts, conventions and standards, the quality of the reports is adversely affected by the judgment and discretion of those responsible for the preparation and presentation of the financial statements (Mangers). Quality in this regard connotes the absence of purposive intervention in the financial reporting process by the management. This study examined the determinants of financial reporting quality of food and beverages firms in Nigeria. The study employed correlation research design in a sample of 16 firms for a period of seven years (2009-2015). Secondary data from the annual reports and accounts of the sample firms was used. Robust Ordinary Least Squares (OLS) regression technique of data analysis was used in the analysis, and the study found after controlling for corporate governance (board composition) that leverage, firm performance and firm size have significant negative effect on the financial reporting quality of the firms. The results also show that firm growth and has aninsignificant positive effect on the financial reporting quality during the period of the study. However, the findings indicated that assets tangibility has a significant positive effect on the financial reporting quality. The study recommends that the regulators, auditors and financial analysts should take into account firm size, firm growth and tangible assets when making decision to address the problem of earnings management in the listed food and beverages firms in Nigeria. The study also recommends that managers of the food and beverages firms in Nigeria should subscribe to the best corporate governance practices and ethical standards in discharging their duties and responsibilities, so as to enhance and improve the quality of financial reports and capital markets decisions.