Moderating Effect of Firm Size on the Relationship Between Corporate Governance Characteristics and Financial Reporting Quality of Listed Industrial Goods Companies in Nigeria

Abstract

Financial reporting focuses on the information needed by external users for decision-making and satisfying the information needs with the financial reporting practices carried out in organizations. The main objective of the study is to examine the Moderating effect of firm size on the relationship between corporate governance characteristics and financial reporting quality of listed industrial goods companies in Nigeria from 2012 to 2022. The population of the study is 13 listed industrial goods and all the population was used by adopting a census sampling technique, this study adopted an ex-post factor research design. Data were sourced from annual financial reports of 13 selected industrial goods companies in Nigeria from 2012 to 2022. This study used regression analysis with the aid of STATA 15 Software. The results revealed that There is a significant relationship between board size and financial reporting quality of listed industrial goods companies in Nigeria, there is a significant relationship between board independence and financial reporting quality of listed industrial goods companies in Nigeria, Firm size has a significant moderating effect on the relationship between board size and financial reporting quality of listed industrial goods companies in Nigeria. The study recommends among others that. The shareholders of listed industrial goods companies in Nigeria should ensure that they maintain large board sizes because the increase in the size of the board will enhance the financial reporting quality of listed industrial goods companies in Nigeria. The executive directors and non-executive directors must be of equal size on the board of directors of listed industrial goods companies in Nigeria to avoid the lop-sidedness of the board members. This will equally enhance the quality of board decisions as they are been reached from both the experiences of those within and outside the organization.