| Peer-Reviewed

Financial Reporting and Organization Performance in Nigeria

Published in Innovation (Volume 3, Issue 1)
Received: 27 January 2022     Accepted: 25 February 2022     Published: 29 March 2022
Views:       Downloads:
Abstract

The purpose of this study was to evaluate the relationship between financial reporting and organizational performance in Nigeria. Data was collected from ten Nigerian manufacturing companies. The researcher adopted expo facto research method in this study. The study adopted inferential statistics for panel data analysis. Results revealed that financial reporting has significant effect on organization performance (R2 = 0.006, t= 4.145 and p = 0.001) of selected manufacturing companies in Nigeria. The study concluded that a financial accounting report is a verifiable document through which a corporate organization's condition and performance may be assessed. As a result, the study recommend the directors who are responsible for drafting this financial report in the traditional sense should ensure that it is prepared in accordance with best international practices. However, since this study has proved that both variables have a considerable influence on each other, management of publicly traded firms must propose new tactics to improve their financial reporting quality in order to dramatically boost their profit. Also, stakeholders and potential investors in publicly traded companies should be suspicious of any changes in the value of return on assets, because financial reporting quality has a direct impact on the variable, which in turn affects profit value.

Published in Innovation (Volume 3, Issue 1)
DOI 10.11648/j.innov.20220301.15
Page(s) 26-32
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Financial Reporting, Nigeria, Organization Performance

References
[1] Abolaji, O. B. & Adeolu, O. O. (2015). Perceived effects of international financial reporting standards (IFRS) adoption on quality financial reporting of quoted companies in Nigeria. Research Journal of Finance and Accounting, 6 (23), 1-8.
[2] Afifa, M. A., Alsufy, F., & Abdallah, A. (2020). Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan. International Journal of Economics & Business Administration, 8 (3), 500-516. https://doi.org/10.35808/ijeba/540.
[3] Aguguom, A., & Salawu, R. (2018). Earnings quality and firms book value: An empirical evidence from the listed firms in Nigeria. Journal of Internet Banking and Commerce, 23, 1-23.
[4] Aguguom, A., Dada, S., & Nwaobia, A. (2019). Earnings Persistence and Firm Performance: Implications of Analysts’ Accurate Forecast Ability from the Emerging Market of Nigeria. International Journal of Digital Accounting Research, 7 (1), 197-214.
[5] Akewushola, R. O., & Saka, R. O. (2018). Executive Compensation and Organizational Financial Performances: Evidence from Selected Diversified Firms in Nigeria. Journal of Business and Management, 20 (3), 08-17.
[6] Akgün, A. İ. (2016). The Reliability of Financial Reporting within Corporate Governance: Evidence from Turkey. Journal of Accounting & Finance, 71, 179-199.
[7] Akintoye, I. R. (2019). Accounting: A Mismanaged Concept Requiring Urgent Re-definition. 28th Inaugural Lecture, Babcock University, Ilishan, Nigeria.
[8] Amiram, D., Bozanic, Z., Cox, J. D., Dupont, Q., Karpoff, J. M., & Sloan, R. (2018). Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature. Review of Accounting Studies, 23 (2), 732-783.
[9] Bai, W., Feng, Y., Yue, U., & Feng, L. (2017). Organizational structure, cross-functional integrations and performance of new product development team. 13th Global congress on manufacturing and management procedia Engineering 17 (4) 621-629.
[10] Barakat, F. S. Q., Perez, M. V. L., Ariza, L. R., Barghouthi, O. A., & Islam, K. M. A. (2020). The impact corporate governance on internet financial reporting: empirical evidence from palestine. International Journal of Accounting & Finance Review, 5 (4), 1-22. https://doi.org/10.46281/ijafr.v5i4.852.
[11] Biswas, T. (2017). Responsibility Accounting: A review of related literature. International Journal of Multidisciplinary Research and Development. 4 (8), 202-206.
[12] Darweesh, M. S. (2015). Correlations between corporate governance, financial performance, and market value.
[13] Dempster, G., & Oliver, N. (2019). Financial Market Pricing of Earnings Quality: Evidence from a Multi-Factor Return Model. Open Journal of Business and Management, 7, 312-329. doi: 10.4236/ojbm.2019.71021.
[14] Gadave, B. R. (2017). Glimpses on Responsibility Accounting and Reporting. Imperial Journal of interdisciplinary Research (IJIR). 3 (2); 22-28.
[15] Habib, A., & Jiang, H. (2015). Corporate governance and financial reporting quality in China: A survey of recent evidence. Journal of International Accounting, Auditing and Taxation, 24, 29-45.
[16] Herath, S. K., & Albarqi, N. (2017). Financial reporting quality: A literature review. International Journal of Business Management and Commerce, 2 (2), 1-14.
[17] Habib, A., Ranasinghe, D., & Huang, H. J. (2018). A literature survey of financial reporting in private firms. Research in Accounting Regulation, 30 (1), 31-37.
[18] Kalyani, S., Mathur, N., & Gupta, P. (2019). Does corporate governance affect the financial performance and quality of financial reporting of companies? A study on selected Indian companies. In Business Governance and Society (pp. 105-125). Palgrave Macmillan, Cham.
[19] Lee, J. (2019). Regional heterogeneity among non-operating earnings quality, stock returns, and firm value in biotech industry. Agricultural Economics, 65 (1), 10–20.
[20] Martowidjojo, Y., Valentincic, A., & Warganegara, D. (2019). Earnings Quality and Market Values of Indonesian Listed Firms. Australian Accounting Review, 88 (29), 95-111.
[21] Mitra, R. (2016). The Association between Earnings Quality and Firm-Specific Return Volatility: Evidence from Japan. Review of Accounting and Finance, 15, 294-316. https://doi.org/10.1108/RAF-08-2015-0100
[22] Monah, A., & Okojie, O. (2018). The Effects of International Financial Reporting Standards Adoption on Earnings Management: Evidence from Commercial Banks in Liberia.
[23] Nerantzidis, M., (2018). Enhancing financial reporting: challenges and opportunities in corporate governance statements, Corporate Governance: The International Journal of Business in Society, 18 (5), 773-778.
[24] Omoregie, O. K., & Kelikume, I. (2017). Executive compensation and banking sector performance: evidence from Nigeria. The Journal of Developing Areas, 51 (2), 1-15.
[25] Zimnicki, T. (2016). Responsibility accounting inspiration for segment reporting. CopernicanJournal of Finance & Accounting, 5 (2), 219-232.
[26] Jensen, M. C. and Meckling, W. H. (1976) Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3, 305-360.
[27] Verrecchia, R. (1983) Discretionary Disclosure. Journal of Accounting & Economics, 5, 179-194. http://dx.doi.org/10.1016/0165-4101(83)90011-3
[28] Davis, J. H., Schoorman, D. L. and Donaldson, L. (1997) The Distinctiveness of Agency Theory and Stewardship Theory. Academy of Management Review, 22, 611-613.
[29] Donaldson, L. and Davis, J. H. (1989) CEO Governance and Shareholder Returns: Agency Theory or Stewardship Theory. Paper Presented at the Annual Meeting of the Academy of Management.
[30] Friedman, A. L. and S. Miles, “Stakeholders: Theory and Practice,” Oxford University Press, Oxford, 2006.
Cite This Article
  • APA Style

    Ahannaya Chinedu Gandolph. (2022). Financial Reporting and Organization Performance in Nigeria. Innovation, 3(1), 26-32. https://doi.org/10.11648/j.innov.20220301.15

    Copy | Download

    ACS Style

    Ahannaya Chinedu Gandolph. Financial Reporting and Organization Performance in Nigeria. Innovation. 2022, 3(1), 26-32. doi: 10.11648/j.innov.20220301.15

    Copy | Download

    AMA Style

    Ahannaya Chinedu Gandolph. Financial Reporting and Organization Performance in Nigeria. Innovation. 2022;3(1):26-32. doi: 10.11648/j.innov.20220301.15

    Copy | Download

  • @article{10.11648/j.innov.20220301.15,
      author = {Ahannaya Chinedu Gandolph},
      title = {Financial Reporting and Organization Performance in Nigeria},
      journal = {Innovation},
      volume = {3},
      number = {1},
      pages = {26-32},
      doi = {10.11648/j.innov.20220301.15},
      url = {https://doi.org/10.11648/j.innov.20220301.15},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.innov.20220301.15},
      abstract = {The purpose of this study was to evaluate the relationship between financial reporting and organizational performance in Nigeria. Data was collected from ten Nigerian manufacturing companies. The researcher adopted expo facto research method in this study. The study adopted inferential statistics for panel data analysis. Results revealed that financial reporting has significant effect on organization performance (R2 = 0.006, t= 4.145 and p = 0.001) of selected manufacturing companies in Nigeria. The study concluded that a financial accounting report is a verifiable document through which a corporate organization's condition and performance may be assessed. As a result, the study recommend the directors who are responsible for drafting this financial report in the traditional sense should ensure that it is prepared in accordance with best international practices. However, since this study has proved that both variables have a considerable influence on each other, management of publicly traded firms must propose new tactics to improve their financial reporting quality in order to dramatically boost their profit. Also, stakeholders and potential investors in publicly traded companies should be suspicious of any changes in the value of return on assets, because financial reporting quality has a direct impact on the variable, which in turn affects profit value.},
     year = {2022}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Financial Reporting and Organization Performance in Nigeria
    AU  - Ahannaya Chinedu Gandolph
    Y1  - 2022/03/29
    PY  - 2022
    N1  - https://doi.org/10.11648/j.innov.20220301.15
    DO  - 10.11648/j.innov.20220301.15
    T2  - Innovation
    JF  - Innovation
    JO  - Innovation
    SP  - 26
    EP  - 32
    PB  - Science Publishing Group
    SN  - 2994-7138
    UR  - https://doi.org/10.11648/j.innov.20220301.15
    AB  - The purpose of this study was to evaluate the relationship between financial reporting and organizational performance in Nigeria. Data was collected from ten Nigerian manufacturing companies. The researcher adopted expo facto research method in this study. The study adopted inferential statistics for panel data analysis. Results revealed that financial reporting has significant effect on organization performance (R2 = 0.006, t= 4.145 and p = 0.001) of selected manufacturing companies in Nigeria. The study concluded that a financial accounting report is a verifiable document through which a corporate organization's condition and performance may be assessed. As a result, the study recommend the directors who are responsible for drafting this financial report in the traditional sense should ensure that it is prepared in accordance with best international practices. However, since this study has proved that both variables have a considerable influence on each other, management of publicly traded firms must propose new tactics to improve their financial reporting quality in order to dramatically boost their profit. Also, stakeholders and potential investors in publicly traded companies should be suspicious of any changes in the value of return on assets, because financial reporting quality has a direct impact on the variable, which in turn affects profit value.
    VL  - 3
    IS  - 1
    ER  - 

    Copy | Download

Author Information
  • Accounting Department, Babcock University, Ilishan-Remo, Nigeria

  • Sections