Corporate Financial Reporting and Investors’ Confidence in Listed Consumer Goods Companies in Nigeria
Article Sidebar
Main Article Content
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.
Downloads
References
Ajayi-Owoeye, A. O., Akinwunmi, A. J., Olayinka, I. M., & Pelemo, M. A. (2022). Financial reporting quality and invest decisions: Evidence from listed manufacturing companies in Nigeria. Archives of Business Research, 10(9). 185-201.
Asterious, D. & Hall, S. (2016). Applied Econometrics: A Modern Approach, London: Palgrave Macmillan.Coy, D., Fischer, M. & Gordon, T. (2001). Public accountability: a new paradigm for college and university annual reports. Crit. Perspect. Account., 12(1), 1–31.
Clarke, H. A. (2004). Investigates the effect of audit firm attributes on earnings quality of listed consumer goods firms in Nigeria. Dissertation paper submitted to the Department of Accounting ABU, Zaria.
Dare, S. O. & Adegbie, F. F. (2023). Corporate financial reporting and investor’s confidence in some quoted industrial companies in Nigeria. International Journal of Latest Technology in Engineering, Management & Applied Science, XII, (VII), 1-8.
Egolum, P. U., Egbunike, F. C., & Eze, M. N. (2021). Effect of financial reporting quality on corporate performance: Empirical evidence from quoted manufacturing companies. International Journal of Creative Research Thought, 9(5), 235- 255.
Falana, G., Ayodele, O. E. & Igbekoyi, M. E. (2023). Effect of big data on accounting information quality in selected firms in Nigeria. International Journal of Research and Innovation in Social Science, 7(3), 789–806.
Falana, G. A., Igbekoyi, O. E. & Oluwagbade, O. I. (2024). Firm attributes and financial reporting quality of listed multinational firms in Nigeria. Universal Journal of Accounting and Finance, Vol. 13, No. 1, pp. 24 - 38, 2025. DOI: 10.13189/ujaf.2025.130103.
Hitz, J. M. (2007). The decision usefulness of fair value accounting-a theoretical perspective,” European accounting review, 16(2), 323–362.
Hung, D. N., Dang, V. T. T. & Archer, L. (2023). Factors affecting the quality of financial statements from an audit point of view: A machine learning approach,” Cogent Business & Management, 10(1), 12-25.
Kamotho, D. W., Moloi, T. S. & Halleen, S. (2022). Assessing the decision usefulness of integrated reports of Namibian listed companies. Journal of Risk Fin. Manag., 15(9), 383.
Kiel, Z., & Nicholson, E. (2003). Audit quality and earnings management in the Tunisian context. International Journal of Accounting and Financial Reporting, 2(2), 17-27.
Kordlouie, H., Mohammadi, F., Naghshineh, N., & Tozandejani, M. (2014). Role of Accounting Conservatism on the Quality of Financial Statements. International Journal of Business and Management, 9(1), 129-139. http://dx.doi.org/10.5539/ijbm.v9n1p129.
Li, X. (2015). Accounting Conservatism and the Cost of Capital: International Analysis. Journal of Business Finance & Accounting, 42(5&6), 555-582. https://doi.org/10.1111/jbfa.12121
Millar, M. (2021). Lightning fast’ future traders working in nanoseconds. [online article], 18 November, <http://www.bbc. co.uk/news/business-15722530>,
Ogan T. P. & Adegbie, F. F. (2022). Corporate financial reporting and investors' confidence in listed Companies in Nigeria. International Journal of Economics, Management, Business and Social Science (IJEMBIS) Peer-Reviewed – International Journal, 2(3), 564-578.
Ogujiofor, M. N., Ozuomba, C. N., Okonye, O. & Ilogho, J. O. (2025). The impact of financial statement manipulation on investor confidence. International Journal of Science and Research Archive, 14(03), 1117-1123.
Ojianwuna, C. (2023). Financial reporting quality and stakeholders’ investment decision in listed deposit money banks in Nigeria. International Journal of Business and Management, 2, (2), 1-31.
Onumoh, A. Y., Ahmed, M. N., Tauhid, S. & Mustapha, L. O. (2024). Integrated reporting and firm value of listed manufacturing firm in Nigeria. 10 (1), 1-18.
Procházka, D. (2014). The IFRS as tax base: potential impact on a small open economy. European Financial Accounting Journal, 9(4), 59–75.
Setiyawati, H., Hidayah, N., Rahmatika, D. N. & Indriasih, D. (2020). The factors that affect the quality of financial reporting. Int. J. Econ. Manag. Stud., 7(1), 32–37.
Seiyaibo, C. M. & Okoye, E. I. (2020). Determinants of financial reporting quality in quoted manufacturing firms: Nigerian evidence. Trends Economics and Management, 36(2), 59–72.
Soyinka, K. A., Fagbayimu, M. O., Adegoroye, E. & Ogunmola, J. O. (2017). Decision usefulness and financial reporting: The general public perspective. Int. J. Acad. Res. Account. Finance Manag. Sci., 7(4), 31-48.
Ugwunta, D. O., & Ugwuany, B. U. (2019). Accounting conservatism and performance of Nigerian consumer goods firms’: An examination of the role of accruals. International Journal of Financial Research, 10(1), 1-9. https://doi.org/10.5430/ijfr.v10n1p1
Watts, R. L. (2003). Conservatism in accounting part I: Explanations and implications. Accounting Horizons, 17(3), 207-221. http://dx.doi.org/10.2139/ssrn.414522
Williams, P. F. & Ravenscroft, S. P. (2015). Rethinking decision usefulness. Contemp. Acc. Res., 32(2), 763–788.
Yew, C., Leong, R. A. & Latiff, O. T. (2020). Decision usefulness of net income versus comprehensive income: Case of financial firms in Malaysia. Asian Journal of Business and Accounting, 13(2), 213–244.
Yohanis, R. & Santiadji, M. (2021). Decision usefulness paradigm: Investment decision making. IOSR Journal of Business and Management, 23(1), 30-34.
This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles published in our journal are licensed under CC-BY 4.0, which permits authors to retain copyright of their work. This license allows for unrestricted use, sharing, and reproduction of the articles, provided that proper credit is given to the original authors and the source.