FINANCIAL REPORTING QUALITY AND INVESTMENT DECISIONS OF SMEs IN NIGERIA

ABSTRACT

The study examined the relationship between financial reporting quality and investment decisions of SMEs in Nigeria. The study utilized a sample size of 120 SMEs across various sectors in Edo State. The sample size was chosen as a result of ease of access to the SMEs. Ordinary Least Square Regression Technique was used with the aid of SPSS 29 software to examine Financial Reporting Quality and Investment Decisions of SMEs in Nigeria. Findings from the study revealed that Comparability of Financial Reporting and Timeliness of Financial Reporting has positive significant relationship with investment decisions of SMEs while Verifiability of Financial Reporting has a positive but insignificant relationship with investment decisions of SMEs and Understandability of Financial Reporting has a negative insignificant relationship with investment decisions of SMEs in Nigeria. The study therefore recommends that SMEs should prioritize policies, activities, procedures, and processes such as timely preparation and presentation of their financial statements, the preparation and presentation of financial reports in accordance with the established standards, and the conduct of an independent audit examination on their financial reports, etc., as such will go a long in improving their investment prospects.