Influence of Accounting Information Quality on Investor Confidence of Industrial Goods Companies in Nigeria
Abstract
This study investigated the influence of accounting information quality on investor confidence in the Nigerian industrial goods sector. Specifically, it examined the effects of timeliness and faithful representation of financial information on share price performance. Using secondary data from eight industrial goods companies listed on the Nigerian Exchange Group (NGX) over the period 2018 to 2024, the study adopted an ex-post facto research design. Timeliness was measured by the number of days between financial year-end and the publication of financial statements, while faithful representation was proxied by engagement with Big 4 audit firms. Investor confidence was captured through share price data, and all collected data were analyzed using panel least squares regression techniques, with cross-sectional dependence tested through the Residual Cross-Section Dependence Test to ensure robust estimates. The findings revealed that timeliness of accounting information had a significant negative effect on investor confidence, with a coefficient of -2.64 (p = 0.000), indicating that delays in reporting undermined market trust. Conversely, faithful representation through Big 4 audit engagement exhibited a strong positive effect, with a coefficient of 95.78 (p = 0.000), highlighting the value investors place on credible financial statements. The study concluded that both timely disclosure and audit credibility are essential for enhancing investor confidence, offering practical guidance for firms and regulators seeking to strengthen transparency and trust in the industrial goods sector.
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