EFFECT OF ENVIRONMENTAL DISCLOSURES ON FINANCIAL REPORTING QUALITY OF MANUFACTURING COMPANIES IN NIGERIA
Authors:
Adepoju, Jadesola Abiodun
Abstract:
The study examined the effect of environmental accounting disclosures on financial reporting quality of the companies during the study period in Nigeria. The study utilized secondary data which were sourced from the various Annual Reports and Statements of Accounts published by quoted manufacturing companies in Nigeria. Both descriptive and econometric techniques were employed in analysing the data. The econometric technique of analysis employed was a logistic regression model as well as the panel data model to capture the determinants of environmental disclosure and its impact on financial reporting quality in Nigeria. The result of a fixed effect panel revealed that only environmental disclosure (EC) had a significant influence on the financial reporting quality (LFRQL). All other explanatory variables had an insignificant effect on LFRQL. One percent increase in EC (t = 3.67726, p <0.05) significantly increased LFRQL by 33 percent in Nigeria. The effects of variables such as LTASS, (t = 0.88533, p < 0.10), LLEV (t = 0.07421, p <0.10) had insignificant positive relationship with LFRQL while LFS, (t = 1.55617, p <0.10) had insignificant positive effects as one percent increase in the size of the firm reduced the extent of LFRQL by 47 percent. The study concluded that environmental disclosure (EC) had a significant positive influence on the financial reporting quality (LFRQL) and this accounted for about 33 percent in Nigeria.