Corporate Governance and the Credibility of Financial Statements in Nigeria
 /  Corporate Governance and the Credibility of Financial Statements in Nigeria

Corporate Governance and the Credibility of Financial Statements in Nigeria

Eyesan Leslie Dabor and Semiu Babatunde Adeyemi

Abstract
Optimal decision-making is based on the quality of information available to the decision maker. Financial
statements published by companies are the major sources of financial information available to investors
and other stakeholders of the company. The credibility of these financial statements has very salient
implications for the quality of decisions that investors can make. By using primary data collected from two
hundred and forty eight respondents, and secondary data from twenty quoted companies in Nigeria, we
sought to determine the relationship between corporate governance and the credibility of financial
statements. The secondary data was analysed using multiple regression, while the primary data was used
to test hypotheses using the chi-squared test. We find that including non-executive directors on the board,
and compliance with audit committee composition as provided by the Nigerian Companies and Allied
Matters Act (CAMA) 1990 are likely to enhance the credibility of financial statements. We did not find
evidence to suggest that CEO duality or absence of institutional shareholding would have negative effect
on the credibility of financial statements. We recommend that apart from including non-executive directors
on the board and ensuring that the composition of the audit committee complies with corporate regulatory
framework, stakeholder must constantly assess the credibility of the financial statements by assessing the
benefits accruing to them in relation to their financial exposure to the organization.

Journal Article
PDF, 288.4 KB
Creative Commons LicenseCreative Commons license
Accounting, Banking and Finance
Accounting
Corporate governance, CEO-duality, discretionary accrual, audit committee, credibility.
Christian Bassey
18th April, 2018
18th April, 2018
http://oer.mciu.edu.ng/wp-content/uploads/2015/04/79-DABOR.pdf


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