INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
MANAGEMENT & APPLIED SCIENCE (IJLTEMAS)  
ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XII, December 2025  
Corporate Financial Reporting and Investors’ Confidence in Listed  
Consumer Goods Companies in Nigeria  
Solarin Temitope Temidayo; Adegbie Folajimi Festus and Solarin Sunday Adekunle  
Babcock University, Department of Accounting, Ilishan-Remo. Ogun State  
DOI : https://doi.org/10.51583/IJLTEMAS.2025.1412000131  
Received: 03 January 2026; Accepted: 09 January 2026; Published: 16 January 2026  
ABSTRACT  
Optimistic investors invest their capital into businesses and projects which result into expansion of businesses,  
create new job possibility and support to the growth and development of the nation economy. Information  
disclosed by the financial statements enables stakeholders to better understand the performance or otherwise of  
the business, as well as the assessment of the financial strength and growth potentials of the firm. For any  
business organization to grow it needs to publish adequate, reliable, clear and fair financial information.  
Evidence from research showed that most businesses released window dressing financial statement for public  
consumption without realizing how it would affect them, which result into lack of trust from the investors. This  
study therefore examined the effect of corporate financial reporting on investor’s confidence of listed consumer  
goods companies in Nigeria for the period between 2015 – 2024. The study adopted ex post facto research design  
and the population consisted of 28 listed consumer goods companies upon which 10 companies were selected  
using purposive sampling techniques. The results from the GMM estimator showed that accounting conservatism  
and cash flow value have positive and significant effect with the co-efficient (0.0068 and 0.0025) and p-value  
(0.009 and 0.001) at 5% level of significant respectively. While equity value has negative coefficient -0.6150  
but significant with p-value 0.000 at 5% level of significant. The study concluded that corporate financial  
reporting enhanced investors’ confidence of listed consumer goods companies in Nigeria. The study  
recommended that companies should prepare their annual financial reports with transparency, truthfulness and  
without compromising the standard in such a way that investors can place the reliance on the contents of the  
reports, which will subsequently propel a positive market response and increase their performance.  
Key Words: Accounting confidence, Cashflow, Equity Value, Investors’ confidence, and Tobin’s Q.  
INTRODUCTION  
Financial information of any organization is influenced by the nature of business operated, and are becoming  
fastest growing and high-risk as it shapes and reshape the investment decision of the user of the financial  
statement of the investors. It also outlines the dangers associated with this type of business and has a big role in  
how profitable the company's operations are. Effective resource management is necessary to boost investor trust,  
according to good business acumen (Ojianwuna, 2023). Firm’s financial reporting has become ever more  
imperative for businesses today as stakeholders are turning their focus towards the critical role of firms’  
performance in making decision (Nacasius et al., 2020).  
Timeliness and reliability of information in the financial report is of the utmost priority of investors because this  
will boast investors’ confidence to consumer goods companies as investors are constantly looking out for sources  
of information that will give them the edge (Millar, 2021). However, lack of investors’ confidence in financial  
reports prompt them to look elsewhere. As a result, they depend more and more on unconventional and unaudited  
data from sources like social media, internet news, and analyst presentations. When it comes to general financial  
information and liquidity, investors are especially eager for certainty. Information speed is thought to be more  
crucial when it comes to other parts of reporting, such rising dangers. This trend is being accelerated by worries  
about traditional corporate reporting, as investors have been increasingly sceptical of the information  
corporations provide since the financial crisis.  
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The main factor driving the capital market is investor confidence (New York Institute of Finance, 2022). This is  
because investors must rely on information provided by businesses in order to comprehend their perspective for  
both present and future investments. Investor confidence is simply the degree to which the firm's information is  
accepted and used to make well-informed investment decisions (Ogan & Adegbie, 2022; Zubair & Ibrahim,  
2011). It suggests the extent to which investors get disclosures from a company and base their investment choices  
on them. This is made possible when the company has an efficient monitoring and control system that reassures  
investors about the company's performance, financial stability, and adherence to pertinent laws.  
Stakeholders can gain a better understanding of the business's profitability or lack thereof, solvency level, and  
evaluation of the firm's financial soundness and growth prospects thanks to information provided by the financial  
statements (Seiyabo & Okoye, 2020). A wide range of users can make management and investment decisions  
with the use of relevant financial information, which offers sufficient information about a company's financial  
status, performance, and changes in financial position. Financial data's main function is to provide the parties  
concerned with information that helps them make wise business and financial decisions. The annual financial  
report is used by many investors to make decisions about the performance of businesses.  
For any business organization to grow it needs to published adequate, reliable, clear and fair financial  
information. Additionally, disclosed financial statements improve comparative analysis and offer a more solid  
foundation for forecasting. However, the trustworthiness of public financial statements has been seriously  
questioned due to the expectations of having a virile published financial report free from window dressing,  
manipulation, or discretionary treatment of financial transactions (Ogan & Adegbie, 2022).  
The financial reports are important to investors' decision-making and should include pertinent and trustworthy  
information for making strategic choices. However, a number of financial scandals, as well as the losses resulting  
from earning management techniques and other financial mishandling, have consistently raised concerns among  
stakeholders and severely undermined investor confidence.  
The problems confronted by the investors are the difficulties on a choice of deciding when to contribute,  
irrespective of whether to contribute. An investor can minimize decision-related risk by rely on the content of  
the information in financial reporting (Dare & Adegbie, 2023). Investors are concern about the going concern of  
the firm which usually determine by the financial performance of the company than how attractive is the  
company or its productivity. This is because no investor would invest in a company that has its viability at risk.  
However, financial information serve as a determinant of the financial statement of the company provides  
(Amaraihu & Onodu 2018).  
Without understanding how it would impact them, the majority of corporations published window-dressing  
financial statements for public consumption. Healthy financial information can only be gathered or disseminated  
with the help of a financial expert. Financial information is used by corporate organisations to inform  
stakeholders about their financial health and operational performance at any given time. Financial reporting is  
the method by which businesses inform the public about their operations (Onumoh et al., 2024). A formal,  
thorough statement that describes the company's financial operations is called financial reporting information.  
In order to assist users in making well-informed decisions on performance evaluation, forecast, investments,  
plans, and expected returns, it contains all relevant data provided in an easily comprehensible way.  
Despite the introduction of strong corporate governance, yet, investor’s confidence in corporate financial  
reporting is still a night mare. With the importance of corporate financial reporting on the investor’s confidence,  
very scanty studies have been conducted in this vital area of research that prompt the researcher to carry out this  
research on this area with specific focus on the consumer goods aspect of manufacturing sector of the country.  
In the light of this, the following researcher hypotheses become pertinent and were tested in this study:  
Hypothesis of the Study  
There is no significant effect of equity value on investors’ confidence of consumer goods companies in Nigeria.  
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Several studies have been conducted across the globe on the corporate financial reporting and the investors’  
confidence. Dominate this body of knowledge were the studies by Ogan and Adegbie (2022) with the focus on  
manufacturing sector for the period between 2011 - 2020; Falana, Igbekoyi and Oluwagbade (2024) on firm  
attributes and financial reporting quality of listed multinational firms in Nigeria for the period between 2011-  
2023. Egolum et al., (2021) on the effect of financial reporting quality on corporate performance. The integrated  
reporting and share price performance of Nigerian listed industrial goods companies were also studied by Akpan  
et al. in 2024. Onumoh and associates (2024), analyse how different types of capital and integrated reporting  
affect company value in the setting of Nigerian manufacturing companies.  
It has been discovered that none of these studies carried its study on consumer goods companies in Nigeria with  
the application of Generalized Moment Method (GMM) despite the unique feature of GMM that make it stand  
out among the estimation techniques that available. The study cover between 2015 – 2024 (10 years). The  
findings of this study will complement the body of knowledge already available on the subject matter, as well  
as act as a fundamental reference for future investigations.  
LITERATURE REVIEW  
Conceptual Review  
Conceptual Review  
Financial reporting quality, according to Hung et al., (2023), is the quality of information included in financial  
reports, including disclosures. This description emphasizes the importance of information and disclosure while  
focusing on the foundation of financial reporting quality. It captures the general understanding of financial  
reporting quality. However, it is quite broad and does not provide specific criteria or metrics of what constitutes  
quality.  
On the one hand, Setiyawati et al., (2020) defined the quality of financial reports as accounting standards  
compliance, measured by the level of non-compliance, and attained through inspection. In this regard, Falana et  
al., (2023) stated that the quality of accounting information can be determined by analyzing accounting  
information’s relevance and timeliness to stakeholders in making decisions. The accounting standards aim to  
produce relevant and reliable financial statements. While offering information on what constitutes financial  
reporting quality, this definition assumes compliance entails quality. But compliance alone might neglect the  
evolving nature of financial reporting practices and the ongoing efforts by regulators to maintain or improve  
quality.  
In this study, the quality of a financial report is conceptualized as the extent to which it contains decision-useful  
and reliable information regarding an organization's financial performance and situation to address users’ needs.  
In this regard, financial reporting quality entails not just information of a financial nature but also non-financial  
information and disclosures that aid decision-making. The study, therefore, represents financial reporting quality  
with faithful representation.  
Accounting Conservatism  
According to Watts (2003), conservatism is defined as the tendency of bookkeeping to have a higher degree of  
verifiability for spotting positive news. An agreement between an entity and other participants is one of the many  
requirements for conservatism. Conservative accounting can lower financing costs, increase returns on  
investment, and boost a company's cash value (Li, 2015). According to Abdolkarim and Mehran's (2016)  
research, there is a strong correlation between accounting conservatism and Tobin's Q; hence, an increase in  
conservatism lowers Tobin's Q and vice versa. Additionally, a number of academic studies have found that  
accounting conservatism has a favourable impact on the quality of financial reporting (Kordlouie et al., 2014;  
Penman & Zhang, 2002; Ugwunta & Ugwuany, 2019).  
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Investor’s Confidence  
Ogujiofor et al. (2025) define investor confidence as the willingness of investors to participate in the investment  
possibilities and related intermediation channels that are accessible to them based on their perceptions of risk  
and return. Investor confidence is essential for success in both domestic and foreign capital markets. This implies  
that investors' decisions to invest are influenced by their opinions on and degrees of trust in the business and the  
stock market. Because future financial needs can require more investment from both present and potential  
investors, investor confidence is essential. The share price is thus represented by the investor's confidence, which  
is referred to as the dependent variable.  
Theoretical Review and Framework  
Decision-usefulness Theory  
Decision-Usefulness theory assumes accounting information's primary goal is to help investors/stakeholders  
make better economic choices, believing information should be relevant, reliable, timely, and comparable, and  
that a stable link exists between data and decisions, with financial reports as key predictors for future returns.  
While decision-usefulness theory serves as the basis of the study’s theoretical foundation, it was propounded by  
George Staubus in 1961. The decision-usefulness theory assumes that rational people utilize accounting  
information and that the primary purpose of financial reporting is to offer relevant information for decision-  
making. Accordingly, the FASB and IASB recognize decision usefulness as the primary goal of financial  
reporting (Falana et al., 2023). In essence, it is a market-based model that assumes the availability of relevant  
information to enable rational decision-making and efficient resource allocation (Abakasanga et al., 2019).  
Decision usefulness theory is important in the financial reporting context, providing insight into financial  
reporting quality. This theory has been used to justify accounting standards, policies, and choice selection for  
over 40 years (William et al., 2015). Soyinka et al., (2017) applied the assumptions of decision usefulness theory  
to explain the financial reporting quality’s importance, decision-making and information provision. Kamotho et  
al., (2022), on the other hand, asserted that it can be extended to an integrated report. Hitz (2007) emphasized  
the importance of decision usefulness in fair value accounting, while Yew et al., (2020) stated decision  
usefulness theory is important in differentiating net income and comprehensive income.  
However, this theory has been criticized due to differences in users’ needs. Kamotho et al., (2022) argued that  
variations might affect certain financial reporting quality in terms of priority and importance. Over time, users'  
perceptions change, and such changes affect the application of decision usefulness theory. According to Yew et  
al., (2020), the assumptions of decision usefulness theory may be abandoned under extreme conditions. While  
the primary assumption of decision usefulness theory lies in utility, Kamotho et al., (2022) opined that such  
might be inadequate for policy choices at micro or macro levels. Other factors inform decision-making and  
choices.  
Stakeholders Theory  
In contrast, the stakeholder idea sees the company as a hub of connections. Stakeholder theory, according to  
Clarke (2004), characterises the company as multilateral agreements between the enterprise and its various  
stakeholders. Stakeholder theory sees a company as having more than two stakeholders, in contrast to agency  
theory, which limits the firm's stakeholders to only shareholders and management. Formal and informal rules  
that have emerged throughout the course of the partnership frame the relationship between the organisation and  
its internal stakeholders, including employees, managers, and owners (Yohanis & Santiadiji, 2021). Although  
management is funded by shareholders, they rely on workers to carry out the business's productive goals.  
Customers, prospective investors, suppliers, and the community are examples of external stakeholders that are  
equally significant and subject to legal and informal regulations that companies must abide by (Yohanis &  
Santiadiji, 2021). The interdependence of the company and society is acknowledged by the stakeholder theory.  
As a result, the company's social mission extends beyond its obligations to shareholders and managers alone  
(Kiel & Nicholson, 2003).  
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Empirical Review  
Many eminent scholars have investigated the relationship between corporate financial reporting and investors’  
confidence from various angles. Egolum, Egbunike and Eze (2021) the effect of financial reporting quality on  
corporate performance of selected quoted manufacturing companies. The explore the uses of Ex-post facto  
research design for the study with the uses of multiple logistic regression, the study showed that there is a  
statistically significant effect of financial reporting quality on corporate performance of selected companies.  
Ojianwuma (2021) evaluated the impact of timely financial statements, accounting conservatism, earnings  
management, and earnings per share on the value (Tobin's Q). The regression model was analysed using the  
Excel analytical tool kit. The analysis' findings showed that Tobin's Q is positively impacted by financial  
reporting. Tobin's Q is positively and significantly impacted by accounting conservatism and timely financial  
reporting, according to the explanatory factors' individual impacts.  
The impact of integrated reporting on the share price performance of Nigerian listed industrial products  
companies was investigated by Akpan et al. in 2024. Industrial products companies were the study's main  
emphasis. The study's conclusions showed that financial capital significantly improves the price-earnings ratio  
of Nigerian listed industrial goods companies. According to the study's findings, integrated reporting  
significantly affects the share price performance of Nigerian listed industrial goods companies.  
Onumoh and associates (2024). Analyse how different types of capital and integrated reporting affect company  
value in the setting of Nigerian manufacturing companies. via 2011 to 2022, information was gathered via annual  
reports and accounts. Multiple regression analysis was used in the study to investigate the connection between  
integrated reporting variables and company value. The results demonstrate that while intellectual capital, human  
capital, and social/relationship capital do not exhibit statistically significant connections, manufacturing capital  
and leverage have a significant impact on business value.  
Dare and Adegbie (2023, investigate the impact of corporate financial reporting on investors’ confidence of  
industrial goods industries in Nigeria with the introduction of audit firm size as moderating variable. The study  
found that corporate financial reporting significantly affects investors’ confidence. The study also found that  
audit firm size moderately affects the effect of corporate financial reporting on investor confidence.  
From the reviewed of empirical evidences, it has been identified that none of the studies conducted here in  
Nigeria focused on consumer goods sector of the manufacturing companies and mostly, despite the usefulness  
of Generalised Moment Method that its unique features make it stand out among the techniques of data analysis,  
none of the study make used of GMM. This is thereby focused on consumer goods companies listed on Nigerian  
Exchange Group with the application of GMM techniques of data analysis.  
METHODOLOGY  
An ex-post factor research design is used in the study. This type of methodology was chosen because, by first  
identifying certain current effects and then looking back by examining causal elements, it helps to analyze  
potential cause and effect correlations. The twenty-eight (28) consumer goods companies listed on the Nigeria  
Exchange Group (NXG) as of December 31, 2024, make up the study's target population.  
Sample Size and Sampling Technique: the study used purposeful sampling techniques to select ten (10) consumer  
goods companies that were used as samples for the study. Corporate financial reporting (independent variable),  
which was proxied by equity value, accounting conservatism, and cash flow value, and dependent variables  
(investors’ confidence) is proxy by Tobin’s Q. The data spanned the ten (10) years from 2015 to 2024.  
Heteroskedasticity, unobserved heterogeneity, and endogeneity are all addressed in the study using the  
Generalized Method of Moments (GMM) estimate. The correlation of independent variables, moderating  
variables, and control variables with error terms is referred to as endogeneity. Because the GMM estimator has  
the greatest ability to handle endogeneity, it is used in this investigation. According to Ullah et al., (2018), the  
GMM changes data to eliminate the impacts of all endogeneity sources, including simultaneity, dynamic  
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endogeneity, and unobserved heterogeneity. The study chose the lags that best address the endogeneity out of  
the several lags that GMM gives. Version 14.5 of STATA software was utilized for the analysis in the study.  
The model is as specified below:  
INCOit = α + β1EQVit + β2ACCit + β3CFVit + µi  
Where:  
INCO = Investors’ Confidence; EQV = Equity Value; ACC = Accounting Conservatism; CFV = Cash Flow  
Value.  
α = Intercept; β1 – β3 = Parameters of Estimate; µit = ɛit +λi; ɛit = stochastic error term; λi = cross-sectionals  
individual difference (Composite Error). A priori expectation is that β1 – β3 > 0  
Variables Measurement:  
Equity Value: It is the total assets minus liabilities (Dare & Adegbie. 2023; Ajayi-Owoeye et al., 2022).  
Accounting Conservatism: it is the measured by (NIt/MVt-1) Net Income scaled by lagged Market value (Khan  
& Watts, 2009; Mohamed Ali Yousuf, 2020).  
Cash Flow Value: It is the free cash flow divided by net operating cash flow (Dare & Adegbie. 2023).  
Tobin’s Q = It is the market valuation of the companies divided by replacement cost of company’s assets (Ogan  
& Adegbie, 2022).  
Data Analysis and Discussion of Findings  
This section's main goal is to convey the findings from the inferential analysis of the various variables.  
Regression analysis is the primary inferential analysis technique used in this study to investigate the corporate  
financial reporting on investors’ confidence of quoted consumer goods companies in Nigeria. The outcomes are  
displayed in accordance with the system's generalized method of moment (GMM) estimator. Unit root testing  
was done before the estimation to determine whether each variable was stationary.  
Correlation Analysis: An implicit assumption that is made when using GMM estimation method is that  
correlation analysis is statistical method that is used to discover if there is a relationship among the variables,  
and how strong that relationship may be. Table 1 displays the relationship among the variables using pairwise  
correlation.  
Table 1: Results of Pairwise Correlation Analysis  
INCO  
EQV  
INV  
CFV  
1
INCO  
EQV  
ACC  
0.7149  
(0.000)  
-0.1852  
(0.033)  
1
-0.1354  
(0.121)  
1
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0.1153  
0.0699  
-0.3024  
1
CFV  
(0.187)  
(0.425)  
(0.000)  
Source: Author’s Computations, (2025).  
Investors’ confidence has a statistically significant positive correlation coefficients with equity value (0.7149  
with p-value of 0.000) but a statistically significant negative correlation with accounting conservatism (-0.1852  
with p-value of 0.033). However, investors’ confidence has no statistically significant correlation coefficients  
with some variables such as cash flow value. This implies that investors’ confidence has significant positive  
relationship with equity value but has significant negative relationship with accounting conservatism. It also  
implies that investors’ confidence moves in the same direction with the former variable but moves in opposite  
direction with the latter variable. Consequently, higher levels of investors’ confidence are associated with higher  
levels equity value, but higher level of investors’ confidence is associated with lower levels of accounting  
conservatism and vice versa.  
There are no statistically significant correlation coefficients between equity value and any of the factors. As a  
result, not all the variables are related to higher or lower levels of equity value. Cash flow value and accounting  
conservatism have a statistically significant negative connection (-0.3024 with p-value of 0.000). In general,  
none of the explanatory factors' correlation coefficients are as high as 0.8. This indicates that using these  
variables together in a regression model would not result in the issue of severe multicollinearity, according to  
the general rule of identifying severe multicollinearity (see Asteriou & Hall, 2016).  
Inferential Analysis: Presented in this section are the results of inferential analysis which are conducted mainly  
to answer the research questions, achieve the objectives of this study and verify its hypotheses. Majorly, the  
regression analysis was conducted and presented here for these purposes. Furthermore, some pre-estimation tests  
such as unit root test, arellano-bond test of auto correlation, sargan test, and variance inflation factor (VIF) test  
were also conducted and presented prior to the major results in order to examine the time series properties of the  
panel data variables employed in the study and take relevance decision as to the specific method of estimation.  
Panel Unit Root Test: The results of panel unit root test are presented here for the variables of this study. For  
robustness purpose, both the Fisher-type augmented Dickey-Fuller (Fisher-ADF) and Fisher-type Phillips-  
Perron (Fisher-PP) unit root tests were conducted and are presented in Table 2. The t-statistic as well as the p-  
values of each test are presented. Each of the variables where first tested at their level series to check their  
stationary. The test was conducted on the first-differenced series of variables that are not stationary at their level  
series.  
Table 2: Unit Root Test Results  
Fisher-ADF  
Fisher-PP  
Variable  
INCO  
EQV  
Statistic  
9.549  
4.995  
4.100  
6.483  
p-value  
0.000  
0.000  
0.000  
0.001  
Statistic  
12.902  
23.86  
p-value  
0.000  
0.000  
0.000  
0.000  
ACC  
9.541  
CFV  
12.543  
Source: Author’s Computations, 2025.  
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Note: INCO investors’ confidence; EQV is equity value; ACC is accounting conservatism; CFV is cash flow  
value.  
Both the Fisher-type ADF and Fisher-type PP test statistics for investors' confidence, equity value, accounting  
conservatism, and cash flow value of the listed consumer goods firms are statistically significant because their  
p-values are less than the 0.1 level of significance, according to the unit root test results shown in Table 2. This  
indicates that these variables are stationary and lack a unit root. As a result, every variable in this study can be  
considered stationary. As a result, estimate techniques like the Generalised Method of Moments (GMM)  
regression can be used without risk of producing misleading regression results.  
Hypothesis: There is no significant effect of equity value on investors’ confidence of consumer goods  
companies in Nigeria.  
Table 3: Two-Step System GMM Regression Results  
Variable  
Coefficient  
0.000556  
-0.61497  
0.006769  
0.002451  
0.146047  
53100.0  
-1.473  
Windmeijer-Corrected Standard Errors  
Z
p-value  
0.223  
0.000  
0.009  
0.001  
0.000  
0.000  
0.140  
0.295  
0.101  
INCO(lag)  
EQV  
0.000457  
0.057244  
0.031371  
0.027535  
0.036029  
1.22  
-10.74  
0.22  
0.34  
4.05  
ACC  
CFV  
Constant  
Wald Chi-squared  
AR test (1)  
AR test (2)  
Sargan test  
Mean VIF  
-1.046  
24.68  
1.15  
Source: Author’s Computations, (2025).  
Research Model and Apriori Expectation  
INCOit = α + β1EQVit + β2ACCit + β3CFVit + µi  
INCO = 0.0005 - 0.0615E + 0.007A + 0.002C  
The model answered the effect of corporate financial reporting on investor’s confidence of listed consumer goods  
companies in Nigeria. The regression estimate showed the significant negative coefficient of equity value  
signifies that per cent point increase in equity value will lead to fall in investors’ confidence by 0.61497 per cent  
points. As regard the fitness of the regression model presented in Table 3, the results indicate that the regression  
model is statistically significant judging from the Wald Chi-squared statistic value of 53100.0 for the model and  
the p-value of 0.000 being lower than 0.05 (5% significant level). This implies that the model is statistically  
significant and has good fit.  
The Arellano-Bond test of auto-correlation (AR), which has a null hypothesis of no auto-correlation, is also  
shown in Table 3, evaluating the study's model in terms of auto-correlation (or serial correlation). The test's  
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fundamental premise is that first-order auto-correlation in the GMM results might be acceptable, but second-  
order auto-correlation seriously calls into question the validity of the findings. The outcome in Table 3  
demonstrates that the p-value is much higher than 0.05 and the first-order auto-correlation statistic value is  
extremely high (i.e., -1.473). This suggests that there is no first-order auto-correlation in the model and satisfies  
the test's condition, indicating that the test's null hypothesis of no first-order auto-correlation could not be  
rejected.  
The outcome also demonstrates that the p-value is significantly higher than 0.05 and the second-order auto-  
correlation statistic value is extremely high (i.e., -1.046). This shows that the test's condition is satisfied because  
the test null hypothesis cannot be rejected at the second-order test. As a result, both first-order and second-order  
tests show that the model is devoid of auto-correlation issues.  
The Sargan test of over-identifying restriction was used to evaluate the validity of the instruments used for this  
model. This was done to confirm the validity of the limitations imposed on the instruments used to prevent over-  
identification. The validity of over-identifying limitations is the test's null hypothesis. The test result's statistic  
value of 24.68 and p-value of more than 0.05 indicate that the model's null hypothesis could not be rejected. This  
suggests that the model is valid for over-identifying restriction.  
The computed variance inflation factor (VIF) for the model revealed a mean value of 1.15, which is lower than  
the rule of thumb value (10) of deciding if the variables would lead to the problem of multicollinearity (Asteriou  
& Hall, 2016). This signifies that there is absence of severe multicollinearity in the model.  
Examining the importance of each explanatory variables of the model, the results show that equity value has  
statistically significant, with the coefficient of equity value (-0.61497) being negative with p-value of (0.000);  
accounting conservatism (0.006769) being positive with p-value of (0.009); and cash flow value has positive  
and significant effect on investors’ confidence with the p-value 0.001 and coefficient 0.002451. These are  
verified by their respective p-values being less than 0.05 (i.e. 5% significance level). The significant negative  
coefficient of equity value signifies that per cent point increase in equity value will lead to fall in investors’  
confidence by 0.61497 per cent points. Also, the significant positive coefficient of accounting conservatism  
denotes that a per cent point increase in accounting conservatism will lead to increase in investors’ confidence  
by 0.006769 per cent points of the listed consumer goods firms in Nigeria.  
Decisions  
At a level of significance 0.05, the Wald Test is 53100.0 while the p-value of the wald test is 0.000 which is less  
than 0.05 adopted level of significance. Therefore, the study rejected the null hypothesis which implied that there  
is significant effect of equity value on investors’ confidence of consumer goods companies in Nigeria.  
Decision; At a level of significance 0.05 and Wald Test 53100, the p-value is 0.000 which is less than the adopted  
significance level of 0.05. Therefore, the study rejected the null hypothesis which implied that corporate financial  
reporting quality had significant effect on investors’ confidence in listed consumer goods companies in Nigeria.  
DISCUSSION OF FINDINGS:  
Based on the results obtained in all the regression estimates presented in Table 4, there is doubt that quality of  
corporate financial reporting plays a significant role in investors’ confidence of listed consumer goods companies  
in Nigeria. The following GMM-based regression models revealed how the corporate financial reporting of the  
listed consumer goods companies can influence investors’ confidence activities. The first regression result shows  
that explanatory variables have positive and significant effect on investors’ confidence of listed consumer goods  
firms in Nigeria as measured by Tobins’ Q of the sampled companies. This evidence attests to the fact that firm’s  
quality of financial reporting dominates and will increase the investors’ confidence by investor more to the  
companies. This is supported by decision-usefulness theory that is of conclusion that accounting information's  
primary goal is to help investors make better economic choices, believing information should be relevant,  
reliable, timely, and comparable, and that a stable link exists between data and decisions, with financial reports  
as key predictors for future returns.  
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INTERNATIONAL JOURNAL OF LATEST TECHNOLOGY IN ENGINEERING,  
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ISSN 2278-2540 | DOI: 10.51583/IJLTEMAS | Volume XIV, Issue XII, December 2025  
The findings of the study is in line with study by Dare and Adegbie (2023); Ojianwuna (2023); Egolum et al.,  
(2021); Ogujiofor et al., (2025); Onumoh et al., (2024); Falana et al., (2024); Ajayi-Owoeye et al., (2022) which  
found positive and significant influence of corporate financial reporting on investors’ confidence of quoted  
manufacturing companies in Nigeria with particular reference to consumer goods sector of the manufacturing  
companies in Nigeria.  
More also, the regression model reveals a significant positive relationship between equity value, accounting  
conservatism, and cash flow value in relation to investors’ confidence as measured Tobins’ Q in the model which  
is quite evident, as firms’ quality of corporate financial reporting significantly prompt the investors’ confidence  
on the activities of consumer goods companies in Nigeria.  
CONCLUSION AND RECOMMENDATIONS  
This study reached notable conclusions on the effect of corporate financial reporting on investors’ confidence of  
listed consumer goods companies. The study concluded that corporate financial reporting has significant effect  
on investors’ confidence of listed consumer goods companies in Nigeria. Specifically, when individual  
explanatory variables are considered, equity value, accounting conservatism, and cash flow value were noted to  
have increased the likelihood of investors’ confidence by way of committing their resources more to the  
company. The findings of this study and the conclusion therefrom present the opportunity to make  
recommendations for relevant stakeholders. Therefore, based on these findings and related conclusion, the  
following recommendations were made:  
The management of the Companies should prepare their annual financial reports with transparency, truthfulness  
and without compromising the standard in such a way that investors can place the reliance on the contents of the  
reports, this will subsequently propel a positive market response and increase their performance.  
The management of the companies should ensure that their published annual reports are in a position to motivate  
prospective investors and encourage the public to develop trust in the organization's leadership.  
The management of consumer goods firms should place the highest focus on the timeliness of audited corporate  
annual financial reports, viewing it as a critical and fundamental factor influencing the value of information  
provided to stakeholders. Therefore, financial reporting must be made public as soon as possible after the end of  
the reported period; otherwise, it loses some of its credibility and economic significance. Consequently, it is  
crucial for the organisations' continued operations to minimize audit delays and enhance the timeliness of audit  
findings.  
Contribution to knowledge and future research  
A distinctive feature of this study is the combination of equity value, accounting conversatism, and cash flow  
regressed against Tobin’s Q of the consumer goods companies in Nigeria. This is rare in the contemporary  
studies on the effects of investors’ confidence on corporate financial reporting of consumer goods companies in  
Nigeria and has provided insights that have added to the body of knowledge in the field of study.  
The study acknowledged the efforts of the previous studies that have investigated the effect of investors’  
confidence on the corporate financial reporting. However, majority of these studies focused on other sector and  
failed to extend the scope up to 2024 while none of these previous studies conducted in Nigeria used generalized  
method of moments (GMM) and mostly used ordinary least square method in analysing their data.  
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