Organizational characteristics and institutional factors on financial reporting quality of local governments in Nigeria
Financial reporting quality (FRQ) is an important concept in organizations. Other than accounting standards, FRQ is said to be influenced by other organizational characteristics. However, the findings of prior studies on the direct effect of organizational characteristics on FRQ are inconclusive. Dr...
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| Format: | Thesis |
| Language: | eng eng |
| Published: |
2019
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| Subjects: | |
| Online Access: | https://etd.uum.edu.my/7826/1/Depositpermission_s901487.pdf https://etd.uum.edu.my/7826/2/s901487_01.pdf |
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| Summary: | Financial reporting quality (FRQ) is an important concept in organizations. Other than accounting standards, FRQ is said to be influenced by other organizational characteristics. However, the findings of prior studies on the direct effect of organizational characteristics on FRQ are inconclusive. Drawing on the existing empirical evidence, this study examined the moderating effect of institutional factors, i.e., professionalism and political influence, on the relationship between organizational characteristics and FRQ. A total of 118 finance directors of local governments from the northwest states of Nigeria participated in the survey research. PLS-SEM was adopted to test the postulated hypotheses. The findings of the direct relationship between organizational characteristics and FRQ revealed that internal audit quality and staff competence significantly influenced FRQ while information technology and council size revealed no significant influence. Furthermore, professionalism was found
insignificant in moderating the relationships between staff competence and FRQ, information technology and FRQ, and council size and FRQ. A significant moderating effect of professionalism was only found in the relationship between internal audit quality and FRQ. However, political influence was found to significantly moderate the relationship between internal audit quality and FRQ, staff competence and FRQ, and information technology and FRQ. Political influence did not moderate the relationship between council size and FRQ. Based on the results found, the management and regulators of local governments should focus on the effective performance of organizational characteristics including high consideration for professionalism in accounting practices to achieve optimal FRQ. Also, efforts should be made to push and maintain a positive political interest when decisions to improve the FRQ of local governments are made. |
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