Abstract
This study examined corporate governance mechanisms and financial reporting quality of listed commercial banks in Nigeria. The population of the study consists of all listed commercial banks on the stock exchange as at 31st December 2018. A sample of nine (9) listed commercial banks were selected and data were collected over the period 2008 to 2018. Descriptive statistics and panel Least Square regression were used for the data analysis. The findings reveal that board size and audit committee were negative and exerted significant impact on financial reporting quality of listed commercial banks while board independence is significant and exerts a positive influence on financial reporting quality of listed commercial banks in Nigeria. Female directorship does not have a significant relationship with financial reporting quality of listed commercial banks in Nigeria. The study therefore recommends that steps should be taken by regulators to stipulate stiffer penalty on firms engaging in earnings smoothing capable of undermining corporate governance ethics and framework for banks in Nigeria as this will serve as deterrent to others and further entrench sanity.
Highlights
In the competitive banking environment, effective corporate governance indicator has been identified as a potent force in the profitability of banks operating in Nigeria (James and Ibezim, 2015)
Based on the first hypotheses, it is seen that board size does have a significant relationship with the financial reporting quality of listed commercial banks in Nigeria
The rationale of the study was to examine the impact of corporate governance mechanisms and financial reporting quality of listed banks in Nigeria, with particular reference to nine (9) selected banks quoted in Nigeria Stock exchange, which are Access bank, Fidelity bank, GT bank, sterling bank, Union bank, UBA, Unity bank, WEMA bank, and Zenith bank
Summary
In the competitive banking environment, effective corporate governance indicator has been identified as a potent force in the profitability of banks operating in Nigeria (James and Ibezim, 2015). The very essence of corporate governance is to monitor the ills of the directors and other management staff with a view to ensuring prudent management of scarce resources as well as financial reporting quality. In Nigeria, the heightened interest in corporate governance of banks was premised on the collapse of several financial and non-financial institutions which includes the bank PHB, Spring bank Plc, Oceanic bank Plc, Intercontinental bank Plc, African petroleum Plc, Levers brother and Cadbury Plc. An investigation into the cause revealed significant, deep-rooted problems in the account preparation and the intentional misconduct of managers which led to the concurrent sack of eight (8) bank chiefs by the governor of central bank of Nigeria and the call for an investigation of the efficacy of the monitoring and controlling of managerial and financial behavior of managers (Ndukwe & Onwuchekwa, 2014, Paulinus, Oluchukwu & Somtochukwu, 2018)
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