EFFECT OF CORPORATE GOVERNANCE MECHANISMS ON FINANCIAL REPORTING QUALITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study investigates the effect of corporate governance mechanisms on financial reporting quality of listed deposit money banks in Nigeria. Discretionary accruals was used as proxy for financial reporting quality. The objectives are to evaluate the influence of board independence, assess the role of audit committee effectiveness, examine the effect of ownership structure, and analyze the impact of CEO duality on DA. A quantitative research design is adopted, utilizing secondary data from 12 listed deposit money banks on the Nigerian Exchange Group (NGX) over the period 2015–2024. Data are sourced from annual reports, NGX filings, and Central Bank of Nigeria (CBN) reports, and analyzed using panel regression with fixed effects. Findings indicate that board independence, audit committee effectiveness, and concentrated ownership significantly reduce DA, while CEO duality increases it. The study concludes that robust corporate governance is essential for minimizing earnings manipulation and enhancing financial reporting quality. Recommendations include strengthening board independence, enhancing audit committee expertise, promoting institutional ownership, and eliminating CEO duality to foster accountability and investor confidence in Nigeria's banking sector.