FINANCIAL REPORTING QUALITY AND INVESTMENT DECISION OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

Financial reporting is to deliver high-quality financial reporting data about economic entities, principally financial in nature, that is helpful for making economic decisions. High-quality financial reporting information is crucial because it will help capital providers and other stakeholders make decisions about lending, investing, and allocating similar resources, thereby improving market efficiency. Therefore, this study sought to determine the effect of financial reporting quality on the investment decision in Nigerian deposit money banks (DMBs). This study specifically examined the effect of financial statement verifiability, financial statement timeliness, board financial expertise, and bank size on the return on equity of DMBs. Ex-Post Facto research design was employed while secondary data were collected from a sample of eight (8) DMBs. Ordinary Least Square (OLS) regression analysis were applied in order to achieve the study objectives since all the variables are stationery at level.  Results of this study found that financial reporting timeliness and board financial expertise have a significant positive effect on Return on Equity of quoted Deposit Money Banks in Nigeria at a 5% level of significance respectively while financial reporting verifiability, and bank size reveal a positive relationship but not statically significant. This study recommended among others that organizations should ensure that financial statements are published to encourage new investors and facilitates the building of public confidence in the enterprises concerned and that the members of the board should be more of those that are of financial expertise.