FINANCIAL REPORTING QUALITY AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA: A STUDY OF FIRST BANK NIGERIA LTD

Abstract

This study examined the effect of financial reporting quality on the financial performance of First Bank of Nigeria Limited. Specifically, the study examined the effects of relevance, faithful representation, timeliness, comparability, and understandability on the financial performance of First Bank of Nigeria Limited. The study adopted a descriptive survey research design. The population consisted of 120 employees drawn from the Accounting, Finance, Internal Audit, Operations, Risk Management, Compliance, and Branch Management departments of First Bank of Nigeria Limited. A sample size of 92 respondents was determined using the Taro Yamane formula, while 88 properly completed questionnaires were retrieved and used for the analysis. Primary data were collected through a structured questionnaire based on a five-point Likert scale. The validity of the instrument was established through face and content validity, while its reliability was assessed using Cronbach's Alpha. Data collected were analyzed using frequency, percentage, mean, and standard deviation, while the hypotheses were tested using Multiple Linear Regression Analysis with the aid of Statistical Package for Social Sciences (SPSS) Version 27 at a 5% level of significance. The findings revealed that relevance (β = 0.286, p < 0.05), faithful representation (β = 0.241, p < 0.05), timeliness (β = 0.214, p < 0.05), comparability (β = 0.198, p < 0.05), and understandability (β = 0.275, p < 0.05) each had a positive and statistically significant effect on financial performance. The regression model produced an R² value of 0.741, indicating that the five dimensions of financial reporting quality jointly explained 74.1% of the variation in financial performance. The study concluded that financial reporting quality significantly influences the financial performance of First Bank of Nigeria Limited. The study recommended that management should strengthen internal controls, improve the quality and timeliness of financial reporting, ensure compliance with applicable financial reporting standards, and enhance the understandability and comparability of financial information.