Digitalized Accounting System and Financial Reporting Quality of Manufacturing Firms in Nigeria
The reliability of financial statements greatly depends on the qualitative and enhancing characteristics of financial reporting quality (FRQ), but over the years, the financial reporting quality has been criticized leading to application accounting software. However, the extent of effect of accounting software on FRQ remains uncertain. Consequently, this study examined the effect of accounting software on FRQ of manufacturing companies in Nigeria. This study adopted a survey research design using 365 questionnaires administered to senior staff of selected manufacturing companies listed in Nigerian Stock Exchange as at 31st December 2020. 348 were retrieved representing 95.3%. The data collected was subjected to internal consistency test and factor analysis and scale reliabilities were computed using Cronbach’s Alpha; with a result of 0.836 on average and this confirmed that internal consistency for this instrument was considered reasonably high. The significance of the Ballett test results from factor analysis further confirm the reliability of the items. The study used Descriptive and multiple regression analysis and found that accounting software had effect on qualitative characteristics (QLTYC), (Adj.R2 = 0.837, F(4, 343) = 446.644; P-value = 0.000). In addition, the study revealed that accounting software significantly affected enhancing characteristics (ENLQTY), (AdR2 = 0.577, F(4, 343) = 119.477; P-value = 0.000). The study recommended that managers of the manufacturing companies should strive to improve on the effective and efficient use of the accounting software towards enhancing financial reporting quality and credibility of financial statements.
Citation: Ogundajo, G.O., , O.O., , I.O.A., & , O.A.O. (2022). Digitalized Accounting System and Financial Reporting Quality of Manufacturing Firms in Nigeria. International Journal of Innovative Research in Accounting and Sustainability, 7(2), 95-106.