IDEAS home Printed from https://ideas.repec.org/a/edt/jsserr/v12y2025i1p245-255.html
   My bibliography  Save this article

Internal Audit And Financial Reporting Quality Of Quoted Firms

Author

Listed:
  • Amaka Elizabeth AGBATA

    (Department of Accountancy, Nnamdi Azikiwe University, Awka. Nigeria)

  • George EZEALA

    (Department of Accountancy, Nnamdi Azikiwe University, Awka. Nigeria)

Abstract

The study examines the effect of internal audit on the financial reporting quality of quoted real estate and construction firms in Nigeria. Ex-post facto research design was employed in the study. The population of the study comprised nine (9) Construction and Real Estate firms quoted on the Nigerian Exchange Group (NGX) as at 31st December 2023. The period covered was 10 years from 2014-2023. Amongst other preliminary analysis and tests, the ordinary least square regression was employed in validating the hypotheses of the study. The study found that internal audit standard has significant effect on accounting conservatism of quoted real estate and construction firms in Nigeria (P = 0.014); internal audit standard has significant effect on earning management of quoted real estate and construction firms in Nigeria (P = 0.001); internal audit standard has significant effect on accrual quality of quoted real estate and construction firms in Nigeria (P = 0.035). Consequent on the above findings, the study recommended amongst others that Real estate and construction firms should invest in comprehensive training programs for their internal auditors to ensure they are well-versed in the latest auditing standards and practices as this will improve the effectiveness of internal audits and help in the detection and prevention of accounting irregularities, thus enhancing the overall quality of financial reporting.

Suggested Citation

  • Amaka Elizabeth AGBATA & George EZEALA, 2025. "Internal Audit And Financial Reporting Quality Of Quoted Firms," Social Sciences and Education Research Review, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 12(1), pages 245-255, July.
    • Handle: RePEc:edt:jsserr:v:12:y:2025:i:1:p:245-255
    DOI: 10.5281/zenodo.15804552
    as

    Download full text from publisher

    File URL: https://sserr.ro/wp-content/uploads/2025/07/sserr-12-1-245-255.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.5281/zenodo.15804552?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Eman F. Attia & Sameh Yassen & Ahmed Chafai & Ahmed Qotb, 2024. "The impact of board gender diversity on the accrual/real earnings management practice: evidence from an emerging market," Future Business Journal, Springer, vol. 10(1), pages 1-18, December.
    2. Nikos Vafeas & Adamos Vlittis, 2024. "Earnings quality and board meeting frequency," Review of Quantitative Finance and Accounting, Springer, vol. 62(3), pages 1037-1067, April.
    3. Beaver, WH & Ryan, SG, 2000. "Biases and lags in book value and their effects on the ability of the book-to-market ratio to predict book return on equity," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 38(1), pages 127-148.
    4. Jones, Jj, 1991. "Earnings Management During Import Relief Investigations," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 29(2), pages 193-228.
    5. Roychowdhury, Sugata, 2006. "Earnings management through real activities manipulation," Journal of Accounting and Economics, Elsevier, vol. 42(3), pages 335-370, December.
    6. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    7. Caramanis, Constantinos & Lennox, Clive, 2008. "Audit effort and earnings management," Journal of Accounting and Economics, Elsevier, vol. 45(1), pages 116-138, March.
    8. Zhang, Jieying, 2008. "The contracting benefits of accounting conservatism to lenders and borrowers," Journal of Accounting and Economics, Elsevier, vol. 45(1), pages 27-54, March.
    9. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    10. CPA Gabriel NTAKIYIMANA, 2024. "Effect of Internal Audit on Financial Reporting Quality of Selected Government Institution in Rwanda," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(4), pages 2391-2400, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hsieh, Chia-Chun & Ma, Zhiming & Novoselov, Kirill E., 2019. "Accounting conservatism, business strategy, and ambiguity," Accounting, Organizations and Society, Elsevier, vol. 74(C), pages 41-55.
    2. DeFond, Mark L., 2010. "Earnings quality research: Advances, challenges and future research," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 402-409, December.
    3. Dechow, Patricia & Ge, Weili & Schrand, Catherine, 2010. "Understanding earnings quality: A review of the proxies, their determinants and their consequences," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 344-401, December.
    4. Habib, Ahsan, 2011. "Audit firm industry specialization and audit outcomes: Insights from academic literature," Research in Accounting Regulation, Elsevier, vol. 23(2), pages 114-129.
    5. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    6. Juan García Lara & Beatriz Osma & Evi Neophytou, 2009. "Earnings quality in ex‐post failed firms," Accounting and Business Research, Taylor & Francis Journals, vol. 39(2), pages 119-138.
    7. Kothari, S. P., 2001. "Capital markets research in accounting," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 105-231, September.
    8. Kothari, S.P. & Ramanna, Karthik & Skinner, Douglas J., 2010. "Implications for GAAP from an analysis of positive research in accounting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 246-286, December.
    9. Martin Walker, 2013. "How far can we trust earnings numbers? What research tells us about earnings management," Accounting and Business Research, Taylor & Francis Journals, vol. 43(4), pages 445-481, August.
    10. Dmitri Byzalov & Sudipta Basu, 2016. "Conditional conservatism and disaggregated bad news indicators in accrual models," Review of Accounting Studies, Springer, vol. 21(3), pages 859-897, September.
    11. Fargher, Neil & Wee, Marvin, 2019. "The impact of Ball and Brown (1968) on generations of research," Pacific-Basin Finance Journal, Elsevier, vol. 54(C), pages 55-72.
    12. Chi, Wuchun & Wang, Chenchin, 2010. "Accounting conservatism in a setting of Information Asymmetry between majority and minority shareholders," The International Journal of Accounting, Elsevier, vol. 45(4), pages 465-489, December.
    13. Karampinis, Nikolaos & Vlismas, Orestes & Ballas, Apostolos, 2024. "Business strategy, earnings properties, and earnings quality," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 56(C).
    14. Araceli Mora & Martin Walker, 2015. "The implications of research on accounting conservatism for accounting standard setting," Accounting and Business Research, Taylor & Francis Journals, vol. 45(5), pages 620-650, August.
    15. Xiaodong Xu & Xia Wang & Nina Han, 2012. "Accounting conservatism, ultimate ownership and investment efficiency," China Finance Review International, Emerald Group Publishing Limited, vol. 2(1), pages 53-77, January.
    16. Habib, Ahsan & Hossain, Mahmud, 2008. "Do managers manage earnings to ‘just meet or beat’ analyst forecasts?," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 17(2), pages 79-91.
    17. repec:zbw:bofrdp:2014_001 is not listed on IDEAS
    18. Khalifa, Mariem & Trabelsi, Samir & Matoussi, Hamadi, 2022. "Leverage, R&D expenditures, and accounting conservatism: Evidence from technology firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 285-304.
    19. Katsuhiko Muramiya & Tomomi Takada, 2010. "Auditor Conservatism, Abnormal Accruals, and Going Concern Opinions," Discussion Papers 2010-64, Kobe University, Graduate School of Business Administration.
    20. Roychowdhury, Sugata & Martin, Xiumin, 2013. "Understanding discretion in conservatism: An alternative viewpoint," Journal of Accounting and Economics, Elsevier, vol. 56(2), pages 134-146.
    21. Akram Khalilov & Beatriz Garcia Osma, 2020. "Accounting conservatism and the profitability of corporate insiders," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(3-4), pages 333-364, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edt:jsserr:v:12:y:2025:i:1:p:245-255. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dan Valeriu Voinea (email available below). General contact details of provider: http://cis01.central.ucv.ro/litere/cadr_juridic/departament_comunicare_jurnalism_stiinte_ale_educatiei/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.