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ABSTRACT
This study examined the effect of tax planning on financial reporting quality in Nigeria utilizing panel data spanning 2017 to 2022 from 16 listed multinational firms. Three hypotheses were raised and evaluated using the Binary Logit Regression estimator. Based on the analysis conducted, the following findings were made: there is a significant relationship between the effective tax rate and the financial reporting quality; tax savings does not have a significant impact on the financial reporting quality; and book-tax differences is significantly related to the financial reporting quality. Based on these findings, it was recommended that: multinational firms in Nigeria should prioritize transparency in their tax reporting practices by providing detailed disclosures about tax strategies, effective tax rates, and how these rates are calculated; it is still crucial for firms to adopt robust tax planning strategies that align with regulatory requirements and ethical standards, however, such tax planning approaches must be sustainable and compliant with Nigerian tax laws; and multinational firms should proactively address these differences by ensuring that their tax accounting practices are closely aligned with financial accounting standards.
