Corporate Governance and Financial Reporting Quality: Empirical Evidence from Selected Nigerian Deposit Money Banks
Abstract
Financial scandals within corporate entities continue to erode investor confidence and destabilize market integrity, with banking institutions being particularly vulnerable given their central role in economic intermediation. This article examines the effect of corporate governance on financial reporting quality in three systematically important Nigerian deposit money banks: Access Bank Plc, Zenith Bank Plc, and Guaranty Trust Holding Company Plc over the period 2014 to 2023. Specifically, the study investigates the impact of Board Independence on Earnings Quality, and the impact of Audit Committee Effectiveness on Disclosure Transparency. A longitudinal panel data design was employed, drawing on ten years of audited annual reports. Simple regression analysis was applied to test two directional hypotheses at a 0.05 significance level. Findings indicate that Board Independence exerts a significant positive effect on Earnings Quality (β = 0.512, R2 = 0.262, p < 0.01), while Audit Committee Effectiveness also exerts a significant positive effect on Disclosure Transparency (β = 0.589, R2 = 0.347, p < 0.001). These outcomes are consistent with agency theory predictions and corroborate findings from comparable emerging market studies. The article contributes original empirical evidence to the governance-reporting quality debate in the Nigerian banking literature and offers actionable policy insights for regulators, institutional investors, and bank boards.
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