Corporate Social Responsibility Disclosure And Financial Reporting Quality Of Listed Industrial Goods Companies In Nigeria

Abstract

Corporate Social Responsibility Disclosure has become an important issue for Companies in many countries since the increased demand for information and transparency by stakeholders in the past three decades it has become a necessity for companies to communicate to stakeholders by disclosing their Corporate Social Responsibility (CSRD) information on their financial statement. In Nigeria some Companies have responded by adopting Corporate Social Responsibility Reporting to provide information on their social performances. This study expands our knowledge by examining the association between Corporate Social Responsibility Disclosure and Financial Reporting Quality. It investigates the extent of relation between CSRD and FRQ on value relevance, accrual quality, and earning persistence of listed industrial goods companies in Nigeria. Annual report of 11 listed industrial goods companies in Nigeria formed the sample size and the study covers the period from 2012 to 2021. Data were analysed using descriptive statistics, pearson’s correlation statistics, multiple ordinary least square regression and granger causality. The study examines how Corporate Social Responsibility Disclosure (CSRD), measured using the GRI framework, affects financial reporting quality. It finds that overall CSRD improves value relevance, accrual quality, and earnings persistence. However, disclosures related to human rights and product responsibility do not significantly influence value relevance. As a result, the study advises Nigerian industrial goods companies to strengthen product standards and employee-related human rights practices.