Human Capital Diversity and Financial Reporting Quality of Quoted Manufacturing Companies in Nigeria

Abstract

Financial reporting quality has been beset with the major problem of non-compliance to company's corporate governance, ethics, and a regulatory standard which is prevalent in the quoted manufacturing companies in Nigeria which incidentally affect their performance and also have a major impact on various human capital diversity. On the other hand, most financial statements do not reflect many factors that affect financial condition and the components of human capital diversity. It is based on this premise that the study investigated the effect of human capital diversity on financial reporting quality of quoted manufacturing companies in Nigeria.The study employed survey research design. The population of the study was all the 66 manufacturing companies quoted on the Nigerian Stock Exchange (NSE). Stratified and purposive sampling technique was used and a total of six hundred and seventy (670) were distributed out of which 600 copies were properly filled and returned representing 89.55% success rate. The reliability test using the Cronbach Alpha is greater than 0.70. The data were analysed using descriptive and inferential statistics by employing the ordinary least square regression. The study discovered that human capital diversity has significant effect on the financial reporting quality (F4, 449) = 118.4, p < 0.05).The study concluded that human capital diversity has significant effect on the financial reporting quality of manufacturing companies in Nigeria. The study recommended that political influence, religious influence, social influence, and intellectual influence of human capital diversity should be taken seriously because it affects the relevance, faithful representation, comparability, verifiability, timeliness and understandability of financial information.