Chief Executive Officers Attributes and Financial Reporting Quality of Listed Non-Financial Firms in Nigeria

Abstract

The integrity of financial statements remains a critical concern in Nigeria following high-profile corporate failures that have eroded investor confidence. The financial reporting users have seen financial reporting as a better way of measuring the firm financial success than mere disclosure of information. This has attracted considerable attention of scholars. While traditional corporate governance research focuses on board composition, this study examined the effect of CEO attributes on financial reporting quality of listed non-financial firms in Nigeria.
Theoretically, this study is primarily underpinned by Stakeholder Theory, which posits that CEO attributes serve as a mechanism to balance the interests of diverse stakeholders through transparent financial disclosure. The methodology adopted an ex post facto research design covering all 104 non-financial firms listed on the Nigeria Exchange Group as at December 2024 over a thirteen-year (2015-2024) period. The study selected 80 listed companies in non-financial sector as the appropriate sample size using probability sample technique. To address potential endogeneity, simultaneity, and unobserved heterogeneity common challenges in corporate finance data the study utilized the Two-Step System Generalized Method of Moments (System-GMM) as the primary statistical estimation technique.
The study found that the CEO attributes had jointly significant effects on Financial Reporting Quality of the listed non-financial firms in Nigeria with the probability of the f-statistics of 0.000. Findings from the System-GMM analysis revealed a statistically significant relationship between CEO attributes and financial reporting quality. Specifically, CEO financial expertise and gender (female representation) exhibit a significant positive effect on accrual earnings quality and timeliness (p < 0.01), suggesting that technical proficiency and diverse perspectives mitigate aggressive earnings management. Furthermore, CEO tenure showed a significant non-linear relationship with earnings persistence, indicating that while experience enhances quality initially, overly long tenures may lead to entrenchment. CEO nationality was found to significantly influence value relevance, reflecting the impact of diverse cultural and professional backgrounds on market perceptions of accounting information. The control variable, firm size consistently showed a significant positive association with reporting timeliness and value relevance, confirming that larger firms face higher pressure for transparency.
The study concluded that CEO specific attributes are fundamental determinants of the integrity of financial disclosures in Nigeria. The integration of Stakeholder and Upper Echelon theories provides a robust framework for understanding how executive "DNA" shapes accounting outcomes. The study recommended that boards of directors prioritize a mix of financial expertise and gender diversity during the CEO succession planning process to enhance the long-term quality and persistence of earnings.