INTEGRATED REPORTING AND FINANCIAL REPORTING QUALITY IN NIGERIAN INDUSTRIAL FIRMS: THE MODERATING ROLE OF BOARD INDEPENDENCE
Keywords:
Integrated Reporting, Financial Reporting Quality, Board Independence, Governance Disclosure, Business Model DisclosureAbstract
This study examined the effect of integrated reporting on financial reporting quality (FRQ) of listed industrial firms in Nigeria, with board independence as a moderating variable. The study focuses on governance, business model, and performance disclosures, while FRQ is measured using the IFRS disclosure compliance index. Using an ex-post facto design, the study analyzes a balanced panel of 130 firm-year observations from 13 listed industrial firms over the period 2015–2024. Random Effects regression is employed, with firm size included as a control variable. The model explains 45.6% of the variation in FRQ (overall R-squared = 0.456). The findings show that governance disclosure (coefficient = 0.143, p < 0.05) and performance disclosure (coefficient = 0.198, p < 0.01) have positive and significant effects on FRQ, while business model disclosure has a positive but insignificant effect (coefficient = 0.058, p > 0.05). Board independence has a significant positive direct effect (coefficient = 0.127, p < 0.05) and strengthens the relationship between governance disclosure and FRQ (interaction coefficient = 0.189, p < 0.05), with a weaker moderating effect on performance disclosure (interaction coefficient = 0.134, p < 0.10). However, it does not significantly moderate the relationship between business model disclosure and FRQ. Firm size also has a positive and significant effect (coefficient = 0.024, p < 0.01). The study concludes that FRQ among Nigerian industrial firms is mainly enhanced by governance and performance disclosures, particularly where boards are more independent. It recommends that regulators promote the adoption of integrated reporting and stronger board independence, while firms should prioritize governance and performance-related disclosures to improve IFRS compliance and reporting quality.References
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