THE IMPACT OF FINANCIAL REPORTING QUALITY ON THE FIRM VALUE IN NIGERIA: EVIDENCE FROM DEPOSIT MONEY BANKS
Abstract
ABSTRACT
Financial reporting is the communication of financial information to various users of accounting information to make an investment decision, obtaining credit facilities, and other financing decisions. Furthermore, most financial reports in Nigeria are governed by regulations and standards from various recognised financial regulatory bodies. Therefore, this study examined the impact of financial reporting quality on the firm value in Nigeria: evidence from Deposit Money Banks. The study employed only secondary source of data collection through 5years (2020-2024) financial report of fifteen (15) Deposit Money Banks listed on Nigerian Exchange Group (NGX) as at 2024 as the sample for the study while correlation and regression analysis was used in analyzing the data with the use of STATA version 14.0 as method of data analysis. The findings of the study revealed that, a positive but insignificant impact between the real earnings management (REM) and firm value of the sampled Deposit Money Banks (DMBs) in Nigeria. Also accrual earnings (ACE) results showed positive and significant relationship with firm value of the sampled Deposit Money Banks (DMBs) in Nigeria. Finally, earnings quality (EAQ) results showed negative and insignificant relationship with firm value of the sampled Deposit Money Banks (DMBs) in Nigeria. The study recommended among others that, Deposit Money Banks (DMBs) in Nigeria should focus less on real earnings manipulation (e.g., overproduction or cost-cutting) and instead enhance transparency and consistency in financial reporting to build long-term investor trust. Banks should stop trying to boost profits by cutting corners or producing more than necessary just to look good on paper. Instead, they should focus on being open and consistent with their financial reports, so investors can trust them in the long run.
Keywords: Financial reporting quality, real earnings, accrual earnings, earnings quality, firm value
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