Effect of Corporate Governance Structure and Financial Reporting Quality of Quoted Pharmaceutical Companies in Nigeria
Effect of Corporate Governance Structure and Financial Reporting Quality of Quoted Pharmaceutical Companies in Nigeria

Summary/Abstract: The study investigated the Effect of Corporate Governance Structure and Financial reporting quality of quoted Pharmaceutical companies in Nigeria. A total of ten Pharmaceutical companies were used from 2006-2019. Data were extracted from the annual report and accounts of the Pharmaceutical companies in Nigeria. Financial reporting quality was calculated using Dechow and Dicher’s (2002) model. The Housman test of multiple regression analysis was employed to test the hypotheses. The result found that Board independence has a positive effect on the financial reporting quality, Board compositions have a positive and significant effect on financial reporting quality, Board meeting has negative association on the financial reporting quality of pharmaceutical companies in Nigeria. The ownership structure also reflects the positive and significant financial reporting quality of the selected companies. The number of times the risk management committee meets yearly as an indicator of corporate governance structure yield a positive influence on the financial reporting quality of selected pharmaceutical companies. The result for a ratio of female members in the board, i.e. gender composition and numerical strength of Audit committee members each, is yielding positive and significant effect on financial reporting quality. The r-squared outcome of 55% implies the ability of the selected pharmaceutical companies in Nigeria. The regression model is also supported by the outcome of Durbin-Watson statistics which is close to 2, indicating the possible absence of autocorrelated in the regression model. It, therefore, recommends that quoted firms should adhere to the guidelines given by CBN and SEC on the code of corporate governance as it affects their financial reporting quality. Regular and spontaneous supervising functions/checks by the different regulating agencies are also recommended.

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