An Assessment of the Effect of Firm Profitability on the Financial Reporting Quality of Quoted Consumer Goods Manufacturing Companies in Sub-Sahara Africa

OGBEBOR, Rowland Osamudiame and IFURUEZE, Meshack S. and OFOR, Theresa Nkechi (2022) An Assessment of the Effect of Firm Profitability on the Financial Reporting Quality of Quoted Consumer Goods Manufacturing Companies in Sub-Sahara Africa. GOUni Journal of Faculty of Management and Social Sciences, 10 (1). pp. 22-36. ISSN 2550-7265

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Abstract

Providing high quality financial reporting information is important because it will positively influence capital providers and other stakeholders in making investment, credit, and similar resource allocation decisions enhancing. This study investigates the effect of firm profitability on the financial reporting quality of listed consumer goods manufacturing firms in Sub-Sahara Africa. In this study, profitability is the firm attribute proxy adopted to evaluate the effect on financial reporting quality in Sub-Sahara Africa. Financial reporting quality is measured in terms of Jones discretionary accrual. The population of the study consists of all the listed consumer goods manufacturing firms with representation from Nigeria, Kenya, and South Africa. As of December 2020, we had 22 consumer goods manufacturing firms in Nigeria, 16 consumer goods manufacturing firms in Kenya and 35 consumer goods manufacturing firms in South Africa. However, only consumer goods manufacturing firms that had all relevant data due to continuous existence were included in the sample. The data for the sampled companies were sourced from related countries’ Exchange Group Fact Books and related companies’ annual financial reports and footnotes for the periods covered in the study. The panel fixed and random effects were employed and estimated using the appropriate techniques. The findings of the study reveal that firm profitability has a significant influence on financial reporting quality in quoted consumer goods manufacturing firm in Sub-Saharan Africa. Based on the findings of the study, we recommend that regulators such as the FRCN can look into the trend of firm’s financial performance to identify cases of potential financial manipulation.

Item Type:	Article
Subjects:	H Social Sciences > HJ Public Finance
Divisions:	Faculty of Management and Social Sciences
Depositing User:	mrs chioma hannah
Date Deposited:	12 Apr 2024 10:49
Last Modified:	12 Apr 2024 11:45
URI:	http://eprints.gouni.edu.ng/id/eprint/4231

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