QUALITATIVE INFORMATION DISCLOSURE AND FIRM FINANCIAL PERFORMANCE

ABSTRACT

The study examined the determinants of financial information disclosure on firm financial performance. The ordinary least square method of regression analysis was used to examine the relationship between the dependent and independent variables. The empirical results indicate that risk management information disclosure (RMID) showed a positive and significant relationship with corporate financial performance, corporate social responsibility information disclosure (CSRID) showed a negative and insignificant relationship with corporate financial performance, internally generated information disclosure (IGID) showed a negative and insignificant relationship with corporate financial performance, and intellectual capital information disclosure (ICID) showed a positive and significant relationship with corporate financial performance. The study therefore recommends that, adequate steps should be taken by the Nigerian Accounting Standards Board (NASB), Securities Exchange Commission (SEC), Nigerian Stock Exchange (NSE) and other regulatory bodies to ensure full compliance with relevant qualitative information disclosure. An increase in the quality of information disclosure will help the users make informed predictions and aid the evaluation of the company’s progress which invariably would reinforce the stock market development. Effective enforcement programmes should be put in place to protect the interest of the diverse user groups. Stringent reward/punishment programme should be introduced in order to ensure that all listed companies comply with the mandatory accounting standards in Nigeria, and that small audit firms should be encouraged to grow up, through merger or acquisition. With consolidation, audit firms can be equipped with the necessary skilled staff, software and hardware that will enable them to compete with the Big four firms. Information cost can be reduced, and moreover the audit firms would not have to compromise the level of information disclosure out of fear.