Firm-Specific Institutional Factors and Financial Reporting Quality of Quoted Deposit Money Banks in Nigeria

Abstract

This study investigated the effect of firm specific institutional factors on the financial reporting quality of quoted deposit money banks in Nigeria. In particular, the study examined how the financial reporting quality is affected by the size of the firm, leverage, profitability, liquidity, firm age, and the ownership structure.
This study was conducted with a longitudinal panel research design, where secondary data were collected from the Annual reports of 11 quoted deposit money banks in Nigeria for the period 2014 to 2024. Model selection was done using Hausman specification test and panel regression techniques such as pooled ordinary least squares, fixed effects and random effects models were applied.
The results indicated that the random effects model was the most suitable model for data analysis. The regression results revealed an R² of 0.2614 and F-statistic of 10.952 (p = .000). The results indicated that financial reporting quality is positively associated with firm size (β = 1.5112; p = .002), and that leverage is negatively associated with financial reporting quality (β = -0.7984; p = .028). Profitability showed positive significance (β = 0.1483, p = .003), whereas liquidity (β = 0.0520, p = .100) and firm age (β = 0.0043, p = .821) were insignificant. The ownership structure had a significant negative effect (β = -0.0221, p = .043).
The study concluded that governance-related institutional factors significantly influenced financial reporting quality among quoted deposit money banks in Nigeria.