International Journal of Social Sciences and Management Review

EFFECT OF ACCOUNTING INFORMATION SYSTEM ON THE QUALITY OF FINANCIAL REPORTING OF LISTED MANUFACTURING COMPANIES IN NIGERIA

Authors: Fasina, Hassan & Olayemi, Olamide

ABSTRACT

The quality of financial reporting has been questioned in the past decades. This has necessitated the need to examine the process through which the financial reports are produced. Thus, this study examined the effect of accounting information system on the quality of financial reporting of listed manufacturing companies in Nigeria. Cross-sectional survey research design was employed. Primary data was used through the administration of questionnaire on two hundred and seventy-six respondents selected for the study. Variables used included system quality, user competence, faithful representation, relevance, timeliness and understandability. Structural Equation Modelling was used to analyze the data collected. The findings of the study revealed that system quality (β = 0.342, p=0.000<0.001, t=3.107>1.96) and user competence (β = 0.014, p=0.000<0.001, t=2.232>1.96) have significant and positive effect on the quality of financial reporting. The study recommended that firms should always maintain a high quality of their AIS through constant update of the AIS hardware and software to meet up with the demands for quality financial reporting. Also, firms should employ people who are sound and competent in using the AIS and knowledgeable in financial reporting standards to prepare the financial reports.

Keywords: Accounting information system; Faithful representation; financial reporting; System quality; DeLone and McLean Model.

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