FINANCIAL REPORTING QUALITY AND PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA

ABSTRACT This study investigates the relationship between financial reporting quality and the performance of listed manufacturing companies in Nigeria. The objective is to determine whether high-quality financial reporting contributes significantly to improved corporate performance in the manufacturing sector. Financial reporting quality is measured using accrual quality (AQ), timeliness (TIM), and disclosure quality (DQ, while firm performance is assessed using Tobin's Q. The study covers data from manufacturing firms listed on the Nigerian Exchange Group (NGX) over a 10-year period (2013-2022). The research employs panel data analysis to provide empirical evidence on how these variables interact over time. To evaluate the effects of 4Q, TIM, and DO on firm performance, the study utilizes pooled OLS, fixed effects, and random effects regression models. From the pooled OLS model, AQ (coefficient = 1.8004, p = 0.417), TIM (coefficient = 0.0079, p = 0.983), and DQ (coefficient = - 7.98e-08, p = 0.364) were all statistically insignificant. In the random effects model, TIM showed a positive and statistically significant effect (coefficient = 0.7433, p = 0.037), while DO had a negative and significant effect (coefficient - -1.55e-07, p = 0.048). AQ remained statistically insignificant (coefficient = 1.2569, p = 0.559). The fixed effects model showed no statistically significant variables: AQ (coefficient = - 2.3395, p = 0.341), TIM (coefficient = 0.4814, p = 0.246), and DQ (coefficient = - 6.86c-08, p = 0.431). Additional robustness tests were carried out to validate the reliability of the regression results. The Breusch-Pagan test for heteroscedasticity returned a p-value of 0.5645, indicating homoscedasticity and validating model consistency. The Hausman specification test yielded a p-value of 0.4226, suggesting that the random effects model was more appropriate than the fixed effects model for this study. Multicollinearity diagnostics using the Variance Inflation Factor (VIF) confirmed no significant multicollinearity issues, with mean VIF = 1.48. The model's overall fit (R°) ranged from 0.0013 in fixed effects to 0.1040 in the random effects model, indicating that most variation in firm performance is explained by other factors not captured in this study. In conclusion, timeliness of financial reporting emerged as a key determinant of firm value, confirming that prompt disclosures foster investor trust and market credibility. Disclosure quality, surprisingly, had a negative and significant impact, suggesting the possibility of "disclosure overload" diminishing clarity and usefulness to stakeholders. Accrual quality, though positively signed, did not show a significant effect in any model. The study recommends that regulatory bodies like the Financial Reporting Council of Nigeria (FRCN) and the Nigerian Exchange Group (NGX) should enhance enforcement of timely and meaningful financial disclosures. Firms are encouraged to focus not only on compliance, but also on the clarity, timeliness, and strategic relevance of the information they provide.