Influence of Ownership Structure on Financial Information Quality of Nigerian Quoted Manufacturing Companies

Abstract

This study examines the influence of ownership structure on the financial information quality of quoted manufacturing companies in Nigeria. Ownership structure, if followed in totality is expected to minimize abnormalities in the preparation of the financial statement of quoted manufacturing companies in Nigeria. However, despite the existence of corporate governance for over a decade in Nigeria, there were a lot of corporate failures in recent years; including the accounting scandals by Cadbury Plc.
etc. The data were extracted from the annual financial reports of sampled companies for the period of six years
(2013—2019). The sample of the study consists of 26 quoted manufacturing companies. The study employed multiple regressions for data analysis, using panel data to examine the influence of ownership structure attributes on financial information quality. The model is composed of a single dependent variable; financial information quality and one explanatory variable with four proxies -
managerial, institutional, concentration, and foreign ownership. The results reveal that ownership concentration and institutional shareholdings were positively, strongly, and statistically significant in predicting real activity manipulation of quoted
manufacturing companies in Nigeria, unlike the managerial and Non-Executive directors’ shareholdings. Therefore, it
is recommended among others that the Financial Reporting Council of Nigeria should motivate institutional investors to invest in the quoted manufacturing companies to reduce activity manipulative practices by the management of quoted manufacturing companies in Nigeria.