Abstract
The financial reporting quality (FRQ) refers to better information dissemination across different users. It is a critical phenomenon for gauging organizations’ performance and survival. In many countries, the public sector has witnessed considerable changes in the past decade. The prominent one is the international public sector accounting standards (IPSAS) for the public sector entities. Drawing on contingency and institutional theories, this study tests the effects of professionalism on the relationship between staff competency and FRQ under the new accounting standards. By using a survey research approach and self-administered questionnaire, data was gathered from 118 directors of finance that represents the local governments of four states in the north-west geopolitical zone of Nigeria. The Partial Least Squares Structural Equation Modeling (PLS-SEM) estimate revealed a significant positive relationship between staff competence and FRQ. Conversely, no significant effect was found in the interaction of professionalism on the model. The implications from the study are discussed in the context of Nigeria.
Highlights
Financial reporting quality (FRQ) has been described as a pervasive phenomenon and is costly to organizations (Achim, 2014; Gjorgieva-Trajkovska et al, 2017)
This paper argues that professionalism could increase the competence of staff to implement improved accounting practices to produce quality financial reports
Additional empirical evidence has been provided in this study, in the area of organizational contingency and financial reporting quality (Chan, 1994; Lüder, 1992; Upping & Oliver, 2011), which indicates that, despite the application of accounting standards, there are other organization factors that interact to affect the quality of reporting outcomes
Summary
Financial reporting quality (FRQ) has been described as a pervasive phenomenon and is costly to organizations (Achim, 2014; Gjorgieva-Trajkovska et al, 2017). Deficiency in FRQ causes substantial losses to organizations and may bring negative and adverse effects on their going concern and consequential liquidation (Martínez-Ferrero, et al, 2013; Tarus et al, 2015). Acceptable conceptualization of what FRQ involves has been a subject of wide debate and an elusive phenomenon among scholars. General inferences from accounting theories depict that the value of financial reports lie in the ability of financial statements to provide accurate and fair information about the underlying financial position and economic performance of an entity (Herath & Albarqi, 2017). The significance of quality financial reporting lies in the effectiveness of information dissemination across different users (Bukenya, 2014; Ştefănescu, 2013), its decision usefulness (Cuong & Ly, 2017) and the essence of reporting what it purports to reveal (Hope, 2003)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
