IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 6 2024
DOI: 10.56201/jafm.v10.no6.2024.pg122.136

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Board Effectiveness and Annual Report Readability of Listed NonFinancial Firms in Nigeria

Mfon Unyime Etuk and Nkanikpo I. Ibok

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Abstract

This study examined the effect of board effectiveness and annual report readability of listed non- financial firms in Nigeria. Particularly, this study obtained data from listed non-financial firms in Nigeria from 2013 to 2022. The total population of this study was 109 non-financial firms listed in Nigeria. The study used the simple filtering technique to select the sample size of 72 firms selected based on certain selection criteria. A panel regression analysis was employed to analyse data extracted from annual report. The findings of the study showed that, board effectiveness when measured in terms of board size showed [coef. = 0.233 (0.000)] and board meeting [coef. = 2.009 (0.000)] had a significant positive effect on the FOG index, and board gender diversity [coef. =- 0.001 (0.927) had a negative effect on the FOG index, there was positive effect of board effectiveness and annual report readability of listed non-financial firms in Nigeria with the application of hausman test with the result of 20.62(0.005). Hence, the null hypothesis that board effectiveness has no significant effect on the annual report readability of listed non-financial firms in study area was rejected. It was recommended that an effective board significantly increases annual report readability thorough effective board monitoring and ensuring that the objective of the firms was protected and adequate information are disclosed. Furthermore, decision makers should pay more attention to the diligence of the board and the independent directors, given that they have an effective role in monitoring the financial reports and increasing annual report readability.

keywords:

Board Effectiveness, Readability and Annual Report

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