Ownership Structure and Financial Reporting Timeliness of Listed Insurance Companies in Nigeria
Keywords:
financial reporting, director ownership, institutional ownership, financial reporting timeliness, insurance firms, Nigeria
Abstract
In view of the rising intricacy of operations of businesses and the evolution of the investment community, greater demands are being made by investors for timely information. Accounting information is thus essential to be made readily accessible within a short period of time else, it loses relevance in terms of its economic value. Continuously, this problem of financial reporting timeliness is more peculiar to companies in the insurance sub-sector which is consequently making stakeholders clutch poor insight about insurance companies in Nigeria. Subsequently, ownership structure as an internal control mechanism, is a critical factor influencing effective corporate governance practices to ensure timely financial reporting. This study therefore investigated the effect of director shareholding and institutional ownership on financial reporting timeliness of listed insurance companies in Nigeria. The population consisted of twenty-five (25) listed insurance companies considering panel data covering 7 years’ period ranging from 2012-2018. Annual reports used were obtained from Nigerian Stock Exchange (NSE) website. Panel corrected standard error regression analysis was used test for the selected influencing variables (director shareholding and institutional ownership) of financial reporting timeliness. The result of the study shows that director shareholding (-0.371) with the p-value of 0.000 and institutional ownership (-0.065) with the p-value of 0.003 both had significant negative effects on timeliness of financial reporting of listed insurance companies in Nigeria. The study concluded that both director shareholding and institutional ownership significantly reduce delays associated with financial reporting of listed insurance companies in Nigeria. It is therefore recommended that insurance firms encourage director’s interests in shareholdings and institutional investors to exercise their monitoring role in ensuring timely financial reporting.
References
REFERENCES
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Alfraih, M. M. (2016). Corporate governance mechanisms and audit delay in a joint audit regulation. Journal of Financial Regulation and Compliance, 24 (3), 292-316. https://doi.org/10.1108/JFRC-09-2015-0054.
Alsmady, A. (2018). The Effect of Board of Directors’ Characteristics and Ownership Type on the Effect of Board of Directors’ Characteristics and Ownership Type on the Timeliness of Financial Reports. International Journal of Business and Management, 13(6), 276-287.
Apadore, K., & Noor, M. M. (2013). Determinants of Audit Report Lag and Corporate Governance in Malaysia. International Journal of Business and Management, 8(15), 151–163. https://doi.org/10.5539/ijbm.v8n15p151
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Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Relationship between corporate governance attributes and voluntary disclosures in annual reports: The Kenyan experience. Financial Reporting, Regulation and Governance, 5(1), 1-25.
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Bowen, R., Johnson, M., Shevlin, T., & Shores, D. (1992). Determinants of the timing of quarterly earnings announcements. Journal of Accounting, Auditing and Finance, 7(4), 395-422.
Brammer, S., & Pavelin, S. (2008). Factors Influencing the Quality of Corporate Environmental Disclosure, 136(July 2006), 120–136.
Bushman R. M., & Smith A. J. (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics, 32(1-3), 237-333
Chang, B. & Yong, W. (2015). The effect of audit report lag and management discretionary report lag on analyst forecasts: evidence from Korea. Investment Management and financial Innovations, 12(1), 318-328.
de Villiers, C., Naiker, V., & van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37, 1636–1663. https://doi.org/10.1177/0149206311411506
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Fakhfakh, A. J. (2016). Audit Reports Timeliness: Empirical Evidence from Jordan. Procedia - Social and Behavioral Sciences, 2–13. https://doi.org/10.1016/j.sbspro.2012.09.229
Fujianti, L. (2016). Analysis Market Reaction on Timeliness Reporting: Study on Indonesia Stock Exchange. International Journal of Business and Management Invention, 5(3), 1–10.
Habbash, M, (2010). The Effectiveness of Corporate Governance and External Audit on Constraining Earnings Management Practices in the UK”, Ph.D. thesis, Durham University,
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Ishak, I., Muhamad Sidek, A. S., & Rashid, A. A. (2010). The Effect of company ownership on the timeliness of financial Reporting: Empirical evidence from Malaysia. UNITAR e-Journal, 6(2), 20-35.
Jensen, Michael C., and William H. Meckling. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3, 305–60.
Kerlinger, F.N., & Rint, N. (1986). Foundations of Behaviour Research. London: Winston Inc
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Masud, A. K., Nurunnabi, M., & Bae, S. M. (2018). The effects of corporate governance on environmental sustainability reporting : empirical evidence from South Asian countries.
Oshodin, E., & Ikhatua, J. O. (2018). IFRS Adoption, Firms’ Characteristics and Timeliness of Financial Information. International Accounting and Taxation Research Group, 2(1), 92-106.
Owusu-Ansah, Stephen (2000):”Timeliness of corporate financial reporting in emerging capital markets: Empirical evidence from the Zimbabwe stock exchange”, Accounting and business research, 30(3), 241-254
Sakka, I. F., & Jarboui, A. (2016). Audit reports timeliness: Empirical evidence from. Cogent Business & Management, Taylor & Francis Journals. 3(1)6–13. https://doi.org/10.1080/23311975.2016.1195680
Shleifer, A., Conyon, M., and Vishny, R.W. (1986), “Large shareholders and corporate control”, Journal.
Shukeri, S. N. & Siti Md. Aminul Islam (2012). The Determinants of Audit Timeliness: Evidence from Malaysia. Journal of Applied Sciences Research, 8(7), 3314-3322,
Tayo, G., & Olayeye, O. (2019). Effect of Audit Committee Characteristics on the Timeliness of Financial Reporting in Nigeria, 24(3), 1–10. https://doi.org/10.9734/JEMT/2019/v24i330167
Turel, A. (2010). Timeliness of financial reporting in emerging capital markets: Evidence from Turkey. Journal of the School of Business Administration, Istanbul University, 39(2), 227-240.-91
Uthman, B. O. T. Ajadi & J. J Asipita (2018). Effect Of Board Characteristics on Timeliness Of Financial Reporting of Listed Insurance Firms in Nigeria. 3(1), 126–136.
Wooldridge, J. (2000). Introductory econometrics: A modern approach. Cincinnati, OH: South Western College
Yoke Chai Mey, Janice Ngen Jiaying, Lim Ju Ann, Mary Ng Boon Yan & Tong Shinn Yi (2017). The Effect of Corporate Governance on the Timeliness of Financial Reporting: Empirical Evidences From Malaysian Public Listed Companies.
Yunos, R. M., Smith, M., Ismail, Z., & Ahmad, S. A. (2011). Inside concentrated owners, board of directors and accounting conservatism. Annual Summit on Business and Entrepreneurial Studies. Proceeding, Malaysia
Abdelsalam, O. H., & Street, D. L. (2007). Corporate governance and the timeliness of corporate internet reporting by UK listed companies. Journal of International Accounting, Auditing and Taxation, 16(2), 111–130.
Adebayo, P. A., N. & Adebiyi, W. K (2016). Effect of Firm Characteristics on the Timeliness of Corporate Financial Reporting: Evidence from Nigerian Deposit Money Banks. International Journal of Economics, Commerce and Management, 4(3), 369–381.
Alfraih, M. M. (2016). Corporate governance mechanisms and audit delay in a joint audit regulation. Journal of Financial Regulation and Compliance, 24 (3), 292-316. https://doi.org/10.1108/JFRC-09-2015-0054.
Alsmady, A. (2018). The Effect of Board of Directors’ Characteristics and Ownership Type on the Effect of Board of Directors’ Characteristics and Ownership Type on the Timeliness of Financial Reports. International Journal of Business and Management, 13(6), 276-287.
Apadore, K., & Noor, M. M. (2013). Determinants of Audit Report Lag and Corporate Governance in Malaysia. International Journal of Business and Management, 8(15), 151–163. https://doi.org/10.5539/ijbm.v8n15p151
Arowoshegbe, A. O., Uniamikogbo, E., & Adeusi, A. S. (2017). Factors Affecting Timeliness of an Audit Report in Nigeria. Funai Journal of Accounting, Business and Finance, 1(1), 26–38.
Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Relationship between corporate governance attributes and voluntary disclosures in annual reports: The Kenyan experience. Financial Reporting, Regulation and Governance, 5(1), 1-25.
Boubakri, N., Cosset, J. C., & Guedhami, O. (2005). Liberalization, Corporate Governance and the Performance of Privatized Firms in Developing Countries. Journal of Corporate Finance, 11(5), 767-790. https://doi.org/10.1016/j.jcorpfin.2004.05.001
Bowen, R., Johnson, M., Shevlin, T., & Shores, D. (1992). Determinants of the timing of quarterly earnings announcements. Journal of Accounting, Auditing and Finance, 7(4), 395-422.
Brammer, S., & Pavelin, S. (2008). Factors Influencing the Quality of Corporate Environmental Disclosure, 136(July 2006), 120–136.
Bushman R. M., & Smith A. J. (2001). Financial accounting information and corporate governance. Journal of Accounting and Economics, 32(1-3), 237-333
Chang, B. & Yong, W. (2015). The effect of audit report lag and management discretionary report lag on analyst forecasts: evidence from Korea. Investment Management and financial Innovations, 12(1), 318-328.
de Villiers, C., Naiker, V., & van Staden, C. J. (2011). The effect of board characteristics on firm environmental performance. Journal of Management, 37, 1636–1663. https://doi.org/10.1177/0149206311411506
Dibia, N. O., & Onwuchekwa, J. C. (2013). An examination of audit reporting lag of companies in the Nigeria stock exchange. International Journal of Business and Social Research, 3(9), 8-16.
Fakhfakh, A. J. (2016). Audit Reports Timeliness: Empirical Evidence from Jordan. Procedia - Social and Behavioral Sciences, 2–13. https://doi.org/10.1016/j.sbspro.2012.09.229
Fujianti, L. (2016). Analysis Market Reaction on Timeliness Reporting: Study on Indonesia Stock Exchange. International Journal of Business and Management Invention, 5(3), 1–10.
Habbash, M, (2010). The Effectiveness of Corporate Governance and External Audit on Constraining Earnings Management Practices in the UK”, Ph.D. thesis, Durham University,
Habib A., Bhuiyan B. U., Huang H. J. & Muhammad S. M. (2018) Determinants of audit report lag: a meta‐ analysis. International Journal of Auditing. 20(18), 1–25
Halder P. K. Mishra, L. (2016). Timeliness of Financial Reporting and Corporate Governance: A Study of Indian Pharmaceutical Industries. Amity Journal of Corporate Governance 1(2), 22-39
Hair, J.F., Black, W.C., Babin, B.J., & Anderson, R.E. (2010). Multivariate Data Analysis. Seventh Edition. Prentice Hall, Upper Saddle River, New Jersey.
Haniffa, R.M. and Cooke, T.E. (2002), “Culture, corporate governance and disclosure in Malaysian corporations”, Abacus, 38(3), 317-349.
Hassan, Y. M. (2016). Determinants of Audit Report Lag: Evidence from Palestine. Journal of Accounting in Emerging Economies. 6(1), 13–32. https://doi.org/10.1108/JAEE-05-2013-0024
Hessel, C. and Norman, M. (1992). Financial Characteristics of Neglected and Institutionally Held Stocks, Journal of Accounting, Auditing and Finance, 7, 313-34
Ibadin, I. M., Izedonmi, F., Ibadin, P. O. (2012). The Association between Selected Corporate Governance Attributes, Firm Attributes and Timeliness of Financial Reporting in Nigeria. Research Journal of Finance and Accounting, 3(9), 137-144.
Ika, S. R., & Ghazali, N. A. M. (2012). “Audit committee effectiveness and timeliness of reporting: Indonesian evidence”. Managerial Auditing Journal, 27(4), 403-424.
Ilaboya, O.J. and Iyafekhe, C. (2014), “Corporate governance and audit report lag in Nigeria”, International Journal of Humanities and Social Science, 4(13), 172-180.
International Accounting Standards Board (IASB) (2010), International Accounting Standard (IAS) 1, Presentation of Financial Statements.
International Accounting Standards Board (IASB) (2010). The Conceptual Framework for Financial Reporting ifrs,org
Ishak, I., Muhamad Sidek, A. S., & Rashid, A. A. (2010). The Effect of company ownership on the timeliness of financial Reporting: Empirical evidence from Malaysia. UNITAR e-Journal, 6(2), 20-35.
Jensen, Michael C., and William H. Meckling. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3, 305–60.
Kerlinger, F.N., & Rint, N. (1986). Foundations of Behaviour Research. London: Winston Inc
Mantobaye Moundigbaye, William S. Rea, and W. R. R. (2017). 1. Which panel data estimator should I use.pdf, (2017). Retrieved from http://www.economics-ejournal.org/economics/journalarticles/2018-4
Masud, A. K., Nurunnabi, M., & Bae, S. M. (2018). The effects of corporate governance on environmental sustainability reporting : empirical evidence from South Asian countries.
Oshodin, E., & Ikhatua, J. O. (2018). IFRS Adoption, Firms’ Characteristics and Timeliness of Financial Information. International Accounting and Taxation Research Group, 2(1), 92-106.
Owusu-Ansah, Stephen (2000):”Timeliness of corporate financial reporting in emerging capital markets: Empirical evidence from the Zimbabwe stock exchange”, Accounting and business research, 30(3), 241-254
Sakka, I. F., & Jarboui, A. (2016). Audit reports timeliness: Empirical evidence from. Cogent Business & Management, Taylor & Francis Journals. 3(1)6–13. https://doi.org/10.1080/23311975.2016.1195680
Shleifer, A., Conyon, M., and Vishny, R.W. (1986), “Large shareholders and corporate control”, Journal.
Shukeri, S. N. & Siti Md. Aminul Islam (2012). The Determinants of Audit Timeliness: Evidence from Malaysia. Journal of Applied Sciences Research, 8(7), 3314-3322,
Tayo, G., & Olayeye, O. (2019). Effect of Audit Committee Characteristics on the Timeliness of Financial Reporting in Nigeria, 24(3), 1–10. https://doi.org/10.9734/JEMT/2019/v24i330167
Turel, A. (2010). Timeliness of financial reporting in emerging capital markets: Evidence from Turkey. Journal of the School of Business Administration, Istanbul University, 39(2), 227-240.-91
Uthman, B. O. T. Ajadi & J. J Asipita (2018). Effect Of Board Characteristics on Timeliness Of Financial Reporting of Listed Insurance Firms in Nigeria. 3(1), 126–136.
Wooldridge, J. (2000). Introductory econometrics: A modern approach. Cincinnati, OH: South Western College
Yoke Chai Mey, Janice Ngen Jiaying, Lim Ju Ann, Mary Ng Boon Yan & Tong Shinn Yi (2017). The Effect of Corporate Governance on the Timeliness of Financial Reporting: Empirical Evidences From Malaysian Public Listed Companies.
Yunos, R. M., Smith, M., Ismail, Z., & Ahmad, S. A. (2011). Inside concentrated owners, board of directors and accounting conservatism. Annual Summit on Business and Entrepreneurial Studies. Proceeding, Malaysia
Published
2022-01-22
How to Cite
Alabi, A., Issa, S. O., & Usman, M. K. (2022). Ownership Structure and Financial Reporting Timeliness of Listed Insurance Companies in Nigeria. Global Journal of Accounting, 7(2), 112-124. Retrieved from http://gja.unilag.edu.ng/article/view/1320
Section
Articles
