The Relationship Between Corporate Governance and Financial Reporting Quality in Nigerian Banks

The quality of financial reporting in the banking sector has profound implications for investor confidence, regulatory oversight, and systemic financial stability. This study investigates the relationship between corporate governance mechanisms and financial reporting quality in Nigerian deposit money banks, focusing on the role of board independence, audit committee effectiveness, and ownership structure. Secondary data are drawn from the annual reports, corporate governance disclosure statements, and auditor reports of fifteen listed banks on the Nigerian Exchange Group for the period 2019 to 2023. Financial reporting quality is measured using accrual-based and real earnings management proxies, following methodologies established in recent accounting literature. Panel regression analysis with fixed effects is employed to control for time-invariant bank characteristics. The theoretical framework integrates agency theory with stewardship theory to provide a balanced perspective on governance-reporting linkages. The study draws on the Central Bank of Nigeria's revised corporate governance guidelines for banks issued in 2023 and evaluates their anticipated impact on reporting behaviour. Existing literature from Nigeria and comparable African banking markets confirms that stronger boards with higher proportions of independent non-executive directors are associated with lower earnings management and higher disclosure completeness. This study contributes a contemporary Nigerian-specific analysis to this literature stream, with recommendations for the Central Bank of Nigeria, the Financial Reporting Council of Nigeria, and audit firms serving the financial services sector. Keywords: corporate governance, financial reporting quality, Nigerian banks, earnings management, board independence