EFFECT OF FINANCIAL REPORTING QUALITY ON FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

This study investigates the effect of financial reporting quality on the financial performance of listed manufacturing firms in Nigeria, focusing on Earning Quality, Conservatism, and Accrual Quality, and their impact on Return on Asset (ROA). The main objective is to understand how these dimensions of financial reporting quality influence ROA among Nigeria manufacturing firms. The specific objectives include examining the relationship between Earning Quality and ROA, assessing the impact of Conservatism on ROA, and evaluating the effect of Accrual Quality on ROA. Three Hypotheses were tested: (1) there is no significant relationship between Earning Quality and ROA, (2) Conservatism has no impact on ROA, and (3) Accrual Quality does not affect ROA. The study utilized secondary date from annual financial statement of 40 selected manufacturing firms listed on the Nigeria Exchange Group (NGX) covering the period from 2018 to 2023. Date analysis was performed using multiple regression and correlation techniques. The results reveal that Earning Quality, Conservatism, and Accrual Quality do not have significant impacts on ROA. Specifically, Earning Quality showed a weak positive correlation and a non- significant negative regression coefficient with ROA, suggesting no direct effect Conservatism also exhibited a weak positive correlation and non- significant positive regression coefficient with ROA. Similarly, Accrual Quality demonstrated a weak negative correlation and non- significant negative regression coefficient with ROA. These findings imply that while financial reporting quality metrics are important for ensuring transparency and compliance, they may not directly influence financial performance metrics such as ROA in Nigeria manufacturing firms. The study highlights the need for further research into contextual factors and industry-specific characteristics that may affect the relationship between financial reporting quality and performance. Recommendation include enhancing transparency in financial reporting practices, focusing on operational efficiencies, and regularly evaluating the effectiveness of financial practices.