IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 9 NO. 1 2023

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Board Heterogeneity and the Financial Reporting Quality of Listed Deposit Money Banks in Nigeria

Peters, George Tamunotonye, John Danebari Zukbee

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Abstract

The study evaluates the effect of board heterogeneity on financial reporting quality drawing samples from listed deposit money banks on the floor of the Nigerian Exchange Group during a 5-year period; 2017-2021. The study employed the independent variables of board independence (BIND), board size (BCOM), and board gender diversity (BGD) as the board characteristics of the listed deposit money banks. The dependent variable of financial reporting quality was measured in terms of Jones Discretionary Accrual (FRQ). Furthermore, the study controls the model’s goodness of fit by employing the variable of cashflow to asset ratio (CFOA). The pool OLS regression was used to test the hypotheses of the study. Findings reveals that the effect of board independence on financial reporting quality is negative and statistically insignificant; The effect of board composition on financial reporting quality is negative and statistically significant; and the effect of board gender diversity on financial reporting quality is negative and statistically insignificant during the period under review. From the findings of this study, the researchers concludes that only board composition has significant effects on the financial reporting quality of listed deposit money banks in Nigeria. However, an insignificant effect is documented for the variable of board gender diversity and board independence. From the findings of this study, the researchers carefully recommends that the number of directors on the board should be of a reasonable size. Also, to guarantee quality financial reports, large boards should be discouraged in Nigerian listed deposit money banks. This will foster faster communication, coordination, and ultimately timely publishing of financial reports

keywords:

Board Independence, Board Size, Board Gender Diversity, Discretionary Accrual

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References:

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Ahmadu U. S., Tukur, G & Aminu, S. M. (2008). Board independence and firm financial
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Ajibade, A. & Richard, A. O. (2019). Board independence and financial performance of deposit
money banks in Nigeria and Canada. Asian Journal of Economics, Business and
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Al-Shaer, H. & Zaman, M. (2016). Board gender diversity and The quality of sustainability
report. Journal of Contemporary Accounting and Economics, 12(3). DOI:
10.1016/j.jcae.2016.09.001

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