IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 2 2025
DOI: 10.56201/jafm.vol.11.no2.2025.pg145.159

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Firms' Characteristics and Financial Reporting Quality of Listed Service Firms in Nigeria

ETUKENYIN, Sophia Gregory, AKPAN, Dorathy Christopher, UMOREN, Adebimpe

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Abstract

Poor financial reporting quality has been the root cause of corporate scandals involving earnings management, improper disclosure and other manipulations of financial reports in many sectors of the Nigerian industry. This study examined the effect of firms’ characteristics on financial reporting quality of listed service firms in Nigeria from 2014 to 2023. The research design adopted in this study was ex post facto, secondary data were used and the population of study was 23 listed service firms in Nigeria and the sample size of 19 were purposively selected. The data were analysed using pool ordinary least square regression analysis and the statistical package employed was STATA version 14.2. The findings of the study revealed that capital structure (coef. = - 0.012[0.023]) has a significant negative effect on financial reporting quality of listed service firms in Nigeria, which means that increased in the percentage of debt financing significantly reduce financial reporting quality due to earnings management to avoid violation of debt covenant, and ownership structure (coeff. = -0.006[0.887]), has no significant effect on financial reporting quality of listed service firms in Nigeria which implies that a decrease or increase in managerial ownership does not have any significant effect on financial reporting quality of listed service firms in Nigeria. Based on this, it was therefore recommended among others that management of listed service firms should ensure effective corporate governance mechanisms, such as independent board oversight and robust internal controls, in order to maintain reporting integrity.

keywords:

Capital structure; ownership structure; financial reporting; firms’ characteristics.

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