International Journal of Finance and Accounting

Assessment of Financial Reporting Quality in a Developing Country Using Nice Qualitative Characteristics Measurement

Martin Kabwe — 2023-02-03

Purpose: The use of different indirect measurement methods by prior empirical studies has led to contradictory findings about financial reporting quality. Therefore, this study assessed the extent of financial reporting quality using the direct method.

Methodology: Data was collected through quantitative content analysis of annual reports and audited financial statements of 20 Zambian listed companies for the period 2012 to 2018 using a direct measurement tool developed by the Nijmegen Center for Economics (NiCE). Descriptive statistics were used to assess the extent of financial reporting quality.

Findings: The study showed that the mean and median score for financial reporting quality is 2.62(52.3%) and 2.55(51%) respectively with a minimum of 2.06(41.2%) and maximum of 3.21(64.2%). The level of financial reporting quality was moderately low. Further, relevance and comparability of financial reports were poor, and companies used only or mostly historical cost instead of fair value as basis for measurement as proposed by the IFRS for its FRQ standard. Therefore, the financial reporting quality of listed companies do not meet all the criterion set out in the IFRS conceptual framework.

Impact of Environmental and Social Disclosure on Return on Asset of Listed Oil and Gas Companies in Nigeria

Toma Ayuba — 2023-02-16

Purpose: The purpose of this study is to examine the impact of environmental and social disclosure on return on asset of listed oil and gas companies in Nigeria.

Methodology: The study used expo factor research. The population of the study comprises of all the thirteen (13) oil and gas companies and eight (8) of those companies made up the sampled population. The study used three variable, the dependent, independent and control variable. ROA is the dependent variable, environmental and social disclosure is the independent variable while firm size and firm age are the control variable. The study used secondary data sourced from annual report and account of the sampled companies for the period 2010 to 2019. To examine the study data, descriptive statistics, correlation matrix and multivariate regression analysis were used.

Findings: The study revealed that environmental and social disclosure have negative impact on return on asset (ROA) of listed oil and gas companies in Nigeria.

Unique Contribution to Theory, Practice and Policy: The study recommended that there should be proactive effort from policy makers like National Environmental Standards and Regulations Enforcement Agency and other standards setting bodies to introduce a standard framework for mandatory disclosure of corporate environmental information.

Effect of International Financial Reporting Standards Compliance on Financial Reporting Quality: Evidence from a Developing Country

Martin Kabwe — 2023-03-02

Purpose: Despite global adoption of International Financial Reporting Standards to improve financial reporting quality, there is still inconclusive and limited empirical evidence of improving financial reporting quality especially from developing countries. Therefore, the study analysed the relationship between International Financial Reporting Standards compliance and Financial Reporting Quality from an African country perspective.

Methodology: Financial Reporting Quality was measured using measurement tool developed by the Nijmegen Center for Economics and International Financial Reporting Standards compliance was measured using dichotomous and partial compliance methods. Study period was 2012 to 2018 involving 20 Zambian listed companies. Study involved panel data analysis and hence, Hausman test was conducted to select the model. Multiple linear regression was used as a data analysis method.

Findings: The results indicated a statistically insignificant relationship between International Financial Reporting Standards compliance and Financial Reporting Quality. Therefore, the implication of the study is that the adoption of International Financial Reporting Standards does not influence financial reporting quality among Zambian listed companies. The low compliance with International Financial Reporting Standards among the listed may have contributed.

Unique Contribution to Theory, Practice and Policy: This is first study in Zambia looking at the influence of IFRS Compliance on Financial Reporting Quality and therefore, contributes to the extant empirical studies analysing whether IFRS compliance influences the financial reporting quality given the mixed results across.