Determinants of Financial Reporting Quality in Public Sector Entities: Empirical Evidence from Debt Management Office of Nigeria

Abstract

This study investigated the determinants of financial reporting quality in public sector entities with particular reference to Debt Management Office of Nigeria. The research design adopted for this study was the ex post facto research design. Secondary data were taken from annual financial reports of Debt Management Office of Nigeria from 2003 to 2021.The study adopted censored sampling technique in selecting 19 samples for the study. Data extracted from the annual financial reports were analyzed with the aid of correlation and regression analyses using Statistical version 14. From the regression results, the variable of internal control disclosure [Coef. = 12.165(0.005)] has a significant positive effect on timeliness of annual reports of Debt Management office during the period under study. This result is in line with apriori expectation but inconsistent with the null hypothesis. The variable of management financial expertise [Coef. = 12.722(0.002)] has a significant positive effect of timeliness of annual reports of Debt Management Office of Nigeria during the period under study. This result conforms to apriori expectation but inconsistent with the null hypothesis, implying that an increase in the number of Directors with financial expertise will significantly increase timeliness of annual reports of Debt Management Office of Nigeria. The variable adoption of IPSAS [Coef. = 7.058 (0.604)] has an insignificant positive effect of timeliness of annual reports of Debt Management Office of Nigeria during the period under study. This result does not conform to apriori expectation though consistent with the null hypothesis. It implies that the adoption of IPSAS insignificantly increase timeliness of annual reports of Debt Management Office of Nigeria. Financial reporting quality is crucial in maintaining the efficiency of financial markets because market participants, such as investors, lenders, and regulators, rely on financial reporting information to make decisions. Hence, it was recommended that Debt Management Office of Nigeria should ensure periodical monitoring and evaluation of their internal control systems. The actual assessment can be executed by the organization’s management in order to promote financial reporting quality among public entities in Nigeria.