Main Article Content
Abstract
This study seeks to examine corporate governance and financial reporting quality of construction companies quoted on the Nigerian Stock Exchange for the period 2016 to 2020. Corporate governance mechanism was proxies by board size, board composition and audit committee composition. Data were collected from annual financial statement of the companies for the study period and analyzed using descriptive statistics, Correlation analysis and Regression analysis by using E-views9 software. The result indicated that board composition and audit committee had positive and significant effect on the financial reporting quality of construction companies. While, board size has a negative and significant effect on financial reporting quality of construction companies. This shows that corporate governance has significant impact on the financial reporting quality of quoted construction companies. The study recommended that strategy need to be developed in order to ensure adherence to corporate governance codes in construction companies, so as to ensure the presentation of articulated, encompassing financial statements.
Keywords
Article Details
Copyright (c) 2023 Emmanuel John Kaka
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
References
- Akeju, J. B., & Babatunde, A. A. (2017). Corporate governance and financial reporting quality in Nigeria. International Journal of Information Research and Review, 4(2), 3749-3753.
- Alkhalidi, T. T. Y. (2023). Corporate governance & earnings persistence: An empirical study of Palestine. Resmilitaris, 13(3), 1834-1851.
- Al-Sufy, F. J., Almbaideen, H. I. M., & Al-Abbadi, H. M. (2013). Corporate governance and its impact on the quality of accounting information in the industrial community shareholding companies listed in Amman financial market. International Journal of Humanities and Social Science, 3(5), 1-12.
- Amah, K. O. & Ekwe, M. C. (2021). Effect of corporate governance structure and financial reporting quality of quoted pharmaceutical companies in Nigeria. Management Dynamics in the Knowledge Economy, 9(2), 225-239. https://doi.org/10.2478/mdke-2021-0016
- Ammar, A. G., Saeed, A., & Abid, A. (2013). Corporate governance and performance: An empirical evidence from textile sector of Pakistan. African Journal of Business Management, 7(22), 2112 – 2118.
- Apodore, K. & Zainol, S. S. (2014). Determinants of corporate governance and corporate performance among consumer product industry in Malaysia: A theoretical model. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(2), 159 – 165
- Ayodeji, I. I. & Festus, A. F. (2021). Corporate governance and financial reporting quality in Nigeria deposit money banks. International Journal of Scientific and Research Publications, 10(8), 560-569.
- Bako, M. A. (2017). The impact of corporate governance on the quality of financial reporting in the Nigerian chemical and paint industry. Research Journal of Finance and Accounting, 9(7), 35-41.
- Burke, R. J. & Mattis, M. C. (2013). Women on corporate boards of directors: International challenges and opportunities. Berlin: Springer Science and Business Media.
- Damagum, Y. M., Oba, V. C., Chima, E.I., & Ibikunle, J. (2014) Women in corporate boards and financial reporting credibility: evidence from Nigeria. Int J Acc Financ Manag Res, 4(1), 1–8.
- Davis, A., & Donaldson, H. (1997). Corporate Governance structure and performance of Malaysian Listed Companies. Journal of Business, Finance and Accounting, 1034-1062.
- DeZoort, F. T. Hermanson, D. R., Archambeault, D. S. & Reed, S. A. (2002). Audit committee effectiveness: A synthesis of the empirical audit committee literature. Journal of Accounting Literature, 21, 38–75.
- Duke II, J., & Kankpang, K. (2011). Linking corporate governance with organisational performance: New insights and evidence from Nigeria. Global Journal of Management and Business Research, 19(12), 47-61.
- Effiok, S. O., Effiong, C., & Usoro, A. A. (2012). Corporate governance, corporate strategy and corporate performance: Evidence from the financial institutions listed on the Nigerian Stock Exchange. European Journal of Business and Management, 4(18), 84 – 95.
- Eshiet, U. E., Adanma, N. J., Akpan, E. O., & Asuguo, O. S. (2023). Corporate governance attributes and financial reporting quality in Nigeria. GPH-International Journal of Business Management, 06(07), 104-130. https://doi.org/10.5281/zenodo.8130949.
- Fodio, M. I., Ibikunle, J. & Oba, V. C. (2013) Corporate governance mechanisms and reported earnings quality in listed Nigerian insurance firms. International Journal of Finance and Accounting, 2(5), 279–286.
- Gardi, B. (2023). Governance and financial reporting quality: The mediation role of IFRS. Sustainability, 15(13), 9869. https://doi.org/10.3390/su15139869
- Gois, C. G. (2014). Financial Reporting Quality and Corporate Governance: The Portuguese Companies Evidence. Instituto Superior De Contabilidade e Administracao De Coimbra, 1-25.
- Hassan, S. U. & Ahmed, A. (2012). Corporate governance, earnings management and financial performance: a case of Nigerian manufacturing firms. International Journal of Contemporary Research, 2(7), 214–226.
- Kantudu, A. L., & Samaila, I. A. (2015). Board characteristics, independent audit committee and financial reporting quality of oil marketing firms: evidence from Nigeria. Journal of Finance, Accounting and Management, 6(2), 34-50.
- Klein, B. (2002). Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics, 375-400.
- Miko, N. U., & Kamardin, H. (2015). Impact of audit committee and audit quality on preventing earnings management in the pre-and post-Nigerian corporate governance code 2011. Procedia Social and Behavioural Sciences, 172, 651–657.
- Nigerian Stock Exchange (2019/2020) Fact Book.
- Norwani, N. M., Mohamad, Z. Z. & Chek, I. T. (2011). Corporate governance failure and its impact on financial reporting within selected companies in Malaysia. International Journal of Business and Social Science, 2(2), 1-9.
- Okafor, U. (2009). Financial reporting quality and corporate governance, idiosyncratic return volatility. Journal of Accounting and Economics, 51, 1-20.
- Osundina, J. A., Olayinka, I. M. & Chukwuma, J. U. (2016). Corporate governance and financial performance of selected manufacturing companies in Nigeria. International Journal of Advanced Academic Research/ Social and Management Sciences, 2(10), 29 – 43.
- Owolabi, S. A., Dada, S. O. (2011). Audit committee: an instrument of effective corporate governance. European Journal of Economics Finance an Administrative Science, 35(35), 174–183.
- Oyejide, T. A., & Soyibo., A. (2001). Corporate governance in Nigeria. Conf Corpor Gov 29, 3–35.
- Pari, C., Hamzeh, D. & Mohadesh, R. (2015). Corporate governance and financial reporting quality empirical evidence from Iran. International journal of business and social science, 3(15): 223-229.
- Shittu I., Ahmad, A.C., & Ishak, Z. (2018). Audit committee independence, abnormal director compensation, corporate governance disclosure and price to earnings multiple of Nigerian firms. Journal of Global Business Advance, 11(2), 156–172.
- Shiyanbola, A. A., Adegbie, F. F. & Salawu, R. O. (2020). Effect of corporate governance on financial reporting quality of quoted financial and non-financial firms in Nigeria. International Journal of Management, Social Sciences, Peace and Conflict Studies, 4(3), 327 – 345.
- SEBI (2003). Report of the SEBI Committee on corporate governance. February 2003 (PDF). Securities and Exchange Board of India Committee on Corporate Governance.
- Shleifer, A., & Vishny, R. W. (2017). A survey of corporate governance. Journal of finance, 52(2).
- Temitope, O. K. (2018) The effect of corporate governance on financial performance of listed companies in Nigeria. European Journal of Accounting, Auditing and Finance Research, 6(9), 85-98.
- Uwuigbe, O. R. (2013). Corporate governance and share price: evidence from listed firms’ in Nigeria. African Research Review, 7(2), 129–143.
- Williams, R. J. (2003). Women on corporate boards of directors and their influence on corporate philanthropy. Journal of Business Ethics, 42(1), 1–10
- Wikipedia. (2009). Evaluating financial reporting quality: The effects of financial expertise versus financial literacy. The Accounting Review, 77, 139-167.
- Wilson, I. (2006). Regulatory and institutional challenges of corporate governance in nigeria post banking consolidation. Nigerian Economic Summit Group (NESG) Economic indicators, April-June.
- Yassin, M. Z. (2021). Investigating the effects of board and firm characteristics on firm performance: an agency theory perspective. Scientific Journal for Financial and Commercial Studies and Researches, 2(1), 228- 264.
- Zabri, S. M., Ahmad, K., & Wah, K.K. (2016). Corporate governance practices and firm performance: Evidence from top 100 public listed companies in Malaysia. 7th International Economics and Business Management Conference, 5th and 6th October, 2015. Procedia Economics and Finance, 35, 287 – 296.
References
Akeju, J. B., & Babatunde, A. A. (2017). Corporate governance and financial reporting quality in Nigeria. International Journal of Information Research and Review, 4(2), 3749-3753.
Alkhalidi, T. T. Y. (2023). Corporate governance & earnings persistence: An empirical study of Palestine. Resmilitaris, 13(3), 1834-1851.
Al-Sufy, F. J., Almbaideen, H. I. M., & Al-Abbadi, H. M. (2013). Corporate governance and its impact on the quality of accounting information in the industrial community shareholding companies listed in Amman financial market. International Journal of Humanities and Social Science, 3(5), 1-12.
Amah, K. O. & Ekwe, M. C. (2021). Effect of corporate governance structure and financial reporting quality of quoted pharmaceutical companies in Nigeria. Management Dynamics in the Knowledge Economy, 9(2), 225-239. https://doi.org/10.2478/mdke-2021-0016
Ammar, A. G., Saeed, A., & Abid, A. (2013). Corporate governance and performance: An empirical evidence from textile sector of Pakistan. African Journal of Business Management, 7(22), 2112 – 2118.
Apodore, K. & Zainol, S. S. (2014). Determinants of corporate governance and corporate performance among consumer product industry in Malaysia: A theoretical model. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(2), 159 – 165
Ayodeji, I. I. & Festus, A. F. (2021). Corporate governance and financial reporting quality in Nigeria deposit money banks. International Journal of Scientific and Research Publications, 10(8), 560-569.
Bako, M. A. (2017). The impact of corporate governance on the quality of financial reporting in the Nigerian chemical and paint industry. Research Journal of Finance and Accounting, 9(7), 35-41.
Burke, R. J. & Mattis, M. C. (2013). Women on corporate boards of directors: International challenges and opportunities. Berlin: Springer Science and Business Media.
Damagum, Y. M., Oba, V. C., Chima, E.I., & Ibikunle, J. (2014) Women in corporate boards and financial reporting credibility: evidence from Nigeria. Int J Acc Financ Manag Res, 4(1), 1–8.
Davis, A., & Donaldson, H. (1997). Corporate Governance structure and performance of Malaysian Listed Companies. Journal of Business, Finance and Accounting, 1034-1062.
DeZoort, F. T. Hermanson, D. R., Archambeault, D. S. & Reed, S. A. (2002). Audit committee effectiveness: A synthesis of the empirical audit committee literature. Journal of Accounting Literature, 21, 38–75.
Duke II, J., & Kankpang, K. (2011). Linking corporate governance with organisational performance: New insights and evidence from Nigeria. Global Journal of Management and Business Research, 19(12), 47-61.
Effiok, S. O., Effiong, C., & Usoro, A. A. (2012). Corporate governance, corporate strategy and corporate performance: Evidence from the financial institutions listed on the Nigerian Stock Exchange. European Journal of Business and Management, 4(18), 84 – 95.
Eshiet, U. E., Adanma, N. J., Akpan, E. O., & Asuguo, O. S. (2023). Corporate governance attributes and financial reporting quality in Nigeria. GPH-International Journal of Business Management, 06(07), 104-130. https://doi.org/10.5281/zenodo.8130949.
Fodio, M. I., Ibikunle, J. & Oba, V. C. (2013) Corporate governance mechanisms and reported earnings quality in listed Nigerian insurance firms. International Journal of Finance and Accounting, 2(5), 279–286.
Gardi, B. (2023). Governance and financial reporting quality: The mediation role of IFRS. Sustainability, 15(13), 9869. https://doi.org/10.3390/su15139869
Gois, C. G. (2014). Financial Reporting Quality and Corporate Governance: The Portuguese Companies Evidence. Instituto Superior De Contabilidade e Administracao De Coimbra, 1-25.
Hassan, S. U. & Ahmed, A. (2012). Corporate governance, earnings management and financial performance: a case of Nigerian manufacturing firms. International Journal of Contemporary Research, 2(7), 214–226.
Kantudu, A. L., & Samaila, I. A. (2015). Board characteristics, independent audit committee and financial reporting quality of oil marketing firms: evidence from Nigeria. Journal of Finance, Accounting and Management, 6(2), 34-50.
Klein, B. (2002). Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics, 375-400.
Miko, N. U., & Kamardin, H. (2015). Impact of audit committee and audit quality on preventing earnings management in the pre-and post-Nigerian corporate governance code 2011. Procedia Social and Behavioural Sciences, 172, 651–657.
Nigerian Stock Exchange (2019/2020) Fact Book.
Norwani, N. M., Mohamad, Z. Z. & Chek, I. T. (2011). Corporate governance failure and its impact on financial reporting within selected companies in Malaysia. International Journal of Business and Social Science, 2(2), 1-9.
Okafor, U. (2009). Financial reporting quality and corporate governance, idiosyncratic return volatility. Journal of Accounting and Economics, 51, 1-20.
Osundina, J. A., Olayinka, I. M. & Chukwuma, J. U. (2016). Corporate governance and financial performance of selected manufacturing companies in Nigeria. International Journal of Advanced Academic Research/ Social and Management Sciences, 2(10), 29 – 43.
Owolabi, S. A., Dada, S. O. (2011). Audit committee: an instrument of effective corporate governance. European Journal of Economics Finance an Administrative Science, 35(35), 174–183.
Oyejide, T. A., & Soyibo., A. (2001). Corporate governance in Nigeria. Conf Corpor Gov 29, 3–35.
Pari, C., Hamzeh, D. & Mohadesh, R. (2015). Corporate governance and financial reporting quality empirical evidence from Iran. International journal of business and social science, 3(15): 223-229.
Shittu I., Ahmad, A.C., & Ishak, Z. (2018). Audit committee independence, abnormal director compensation, corporate governance disclosure and price to earnings multiple of Nigerian firms. Journal of Global Business Advance, 11(2), 156–172.
Shiyanbola, A. A., Adegbie, F. F. & Salawu, R. O. (2020). Effect of corporate governance on financial reporting quality of quoted financial and non-financial firms in Nigeria. International Journal of Management, Social Sciences, Peace and Conflict Studies, 4(3), 327 – 345.
SEBI (2003). Report of the SEBI Committee on corporate governance. February 2003 (PDF). Securities and Exchange Board of India Committee on Corporate Governance.
Shleifer, A., & Vishny, R. W. (2017). A survey of corporate governance. Journal of finance, 52(2).
Temitope, O. K. (2018) The effect of corporate governance on financial performance of listed companies in Nigeria. European Journal of Accounting, Auditing and Finance Research, 6(9), 85-98.
Uwuigbe, O. R. (2013). Corporate governance and share price: evidence from listed firms’ in Nigeria. African Research Review, 7(2), 129–143.
Williams, R. J. (2003). Women on corporate boards of directors and their influence on corporate philanthropy. Journal of Business Ethics, 42(1), 1–10
Wikipedia. (2009). Evaluating financial reporting quality: The effects of financial expertise versus financial literacy. The Accounting Review, 77, 139-167.
Wilson, I. (2006). Regulatory and institutional challenges of corporate governance in nigeria post banking consolidation. Nigerian Economic Summit Group (NESG) Economic indicators, April-June.
Yassin, M. Z. (2021). Investigating the effects of board and firm characteristics on firm performance: an agency theory perspective. Scientific Journal for Financial and Commercial Studies and Researches, 2(1), 228- 264.
Zabri, S. M., Ahmad, K., & Wah, K.K. (2016). Corporate governance practices and firm performance: Evidence from top 100 public listed companies in Malaysia. 7th International Economics and Business Management Conference, 5th and 6th October, 2015. Procedia Economics and Finance, 35, 287 – 296.