ACCOUNTING INFORMATION QUALITY AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

 Accounting information quality and financial performance of listed consumer goods manufacturing companies in Nigeria was the focus of this study. Specifically, the study investigated the relationship between FRAI and ROE, the relationship between RVAI and ROE, and the relationship between TIMEAI and ROE.  Ex-post Facto Cross-Sectional research design was used for the study. Historical data was derived from the Nigerian Stock Exchange Website from 2009-to 2019. The sample size used was twelve (12) listed consumer goods manufacturing companies in NSE from 2009-2019. Faithful Representation of Accounting Information (FRAI), Relevance of Accounting Information (RVAI), and Timeliness of Accounting Information (TIMEAI) were explanatory proxies of the independent variable, while return on Equity (ROE) was the only proxy of the dependent variable. SPSS Version twenty-two (22) Statistical Package for Social Science software by applying regression analysis using ordinary least squares multiple regression analysis for the data. The explanatory variables were subjected to a diagnostic test (Durbin Watson) to qualify the data and to regress against financial performance variables. The findings indicated that the data were qualified and ordinary least squares multiple regression analysis was appropriately suitable in explaining all the dependent variables. The findings indicated that faithful representation of accounting information (FRAI) has a negative insignificant relationship with ROE and timeliness of accounting information (TIMEAI) has a negative significant relationship with return on equity (ROE). While the relevance of accounting information (RVAI) has a positive insignificant relationship with return on equity (ROE). According to the findings of the empirical analysis, the stakeholders or users of accounting information have lost trust and confidence in the annual financial statements as a result of the incessant financial fraud in almost every sector of the Nigerian economy, particularly in manufacturing companies, as evidenced by Cadbury Plc in Nigeria in 2007 and others. The study recommended, among other things, that company managements and capital providers (business owners) establish a strong policy to reduce the chances of managers, including the chief accounting officer of any manufacturing corporate entity, manipulating accounting information in annual reporting using discretionary accruals, so that the essential qualitative characteristics (relevance and faithful representation), especially, will have a wonderful impact on going back on shareholders’ equity of listed customer items production companies in Nigeria.