EFFECT OF CORPORATE GOVERNANCE MECHANISMS ON FINANCIAL REPORTING QUALITY Audit quality, Board effectiveness, Corporate governance, Financial reporting, Human resource competence, Regulatory frameworks Section Articles

Abstract

Financial reporting quality is characterized by the accuracy, reliability, completeness, and transparency of the financial information, while a board’s role is to help to set and steer an organisation’s strategic direction, monitor planning and policies and ensure accountability. This study aims to enhance the existing literature by exploring the effect of corporate governance mechanisms on the quality of financial reporting in Nigeria, while also reviewing relevant past publications, textbooks, and academic journals. In the course of the study, agency theory explored the connection between corporate governance and financial reporting quality by focusing on the conflicts of interest that may occur between principals (shareholders) and agents (management).  The study adopted the theoretical and content analysis approach (desk review). Extensive literature review was conducted. The study revealed that the increasing reliance on reputable international firms by larger companies has improved confidence in their financial disclosures. The conclusion highlighted that by strengthening governance structures and regulatory frameworks, Nigeria can enhance the credibility of its financial reports, ultimately fostering investor confidence and economic growth. It was recommended that regulators must improve enforcement of corporate governance codes to ensure compliance. It further recommended that, training programs for audit committee members and directors can enhance their understanding of financial reporting standards.