EFFECT OF FIRM SIZE ON FINANCIAL REPORTING QUALITY OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA: THE MODERATING ROLE OF AUDIT QUALITY

Abstract

This study examines the impact of firm size on the financial reporting quality (FRQ) of listed consumer goods companies in Nigeria, with audit quality as a moderating variable. Using a quantitative research approach and ex-post facto design, the study analyzed secondary data from reputable databases and financial reports of 17 purposively selected companies. Findings reveal a significant negative effect of firm size on FRQ, indicating that larger firms often have lower financial reporting quality. However, high audit quality significantly moderates this relationship, mitigating the negative impact of firm size on FRQ. The study concludes that while larger firm size tends to diminish FRQ, robust audit practices can counteract these adverse effects. Recommendations include enhancing audit quality to improve FRQ, leveraging profitability to bolster financial reporting practices, and adopting comprehensive internal controls and strict reporting standards to address challenges associated with larger firm sizes.