Amah K. Ogbonnaya 1 , Michael C. Ekwe 2 , John U. Ihendinihu 3 .
1,2&3 Accounting Department, College of Management Sciences, Michael Okpara University of
Agriculture, Umudike, Abia State Nigeria
Correspondence: Amah Kalu Ogbonnaya; Email: email@example.com , 08037790090
This study investigated the impact of Corporate Governce structure and Financial Reporting quality of
quoted Pharmaceutical companies in Nigeria. Data were extracted from the annual reports and accounts of the ten pharmaceutical companies. The Housman test of multiple regression analysis was employed to test the hypotheses. The result found that Board independence has positive effect on fincial reporting quality, Board composition has positive and significant effect on financial reporting quality and Board meeting has a negative association on financial reporting quality of Pharmaceutical companies in Nigeria. The Ownership structure also reflex positive and significant on financial reporting quality of sampled companies. The numbers of times risk management committee meet yearly as an indicator of corporate governance structure yield a positive influence on financial reporting quality of selected Pharmaceutical companies. The result for ratio of female member in the board i.e. gender composition and numerical strength of Audit committee members each also yields positive and significant effect on financial reporting quality. Overall, the r-squared outcome of 55% underscores the ability of the selected explanatory variable to predict changes that occur in the financial reporting quality of selected pharmaceutical firms. The probability value of the F-statistics is significant at 1% lending credibility to regression equation and power of the independent variable in predicting changes that occur in the fincial reporting quality of selected pharmaceutical companies. The regression model is also supported by the outcome of Durbin-Watson statistics which is very close to 2 indicating that possible absence of autocorrelation in the regression model. It is therefore recommended that Board of Directors/Mangers of Pharmaceutical companies in
Nigeria should adhere to cannons of prudent financial management as enshrined in the prudential
guidelines as well as apply the codes of corporate governce as prescribed by the SEC and other regulatory agencies. Regular and spontaneous supervising function/check by the different regulatory agencies is also recommended.
Keywords: Corporate Governance, Financial Reporting Quality, Pharmaceutical Firms, Accrual Model.
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