IMPACTS OF CORPORATE GOVERNANCE AND ACCOUNTING CONTROL PRACTICE ON FINANCIAL REPORTING QUALITY OF MICROFINANCE BANKS IN NIGERIA

Abstract

The persistent failures of microfinance banks in Nigeria have undermined stakeholders' faith in the quality of financial reporting of these institutions, attributable to board inefficiencies and inadequate internal control systems in many MFBs. This study investigated the influence of corporate governance and accounting control practices on the quality of financial reporting in Microfinance Banks located in Kwara State, Nigeria. This study employed a cross-sectional survey research methodology and utilized a purposive sample technique to pick 252 target respondents from the staff of 28 licensed Microfinance Banks in Kwara State, Nigeria. Primary data were gathered by a questionnaire distributed to the chief finance officer, internal audit manager, accountant, and other personnel, and the quantitative data were analyzed utilizing multiple regression techniques. The study demonstrated that board expertise positively and significantly influences the financial reporting quality of MFBs and board independence does not significantly affect the financial reporting quality of MFBs. The study indicated that board competence, board responsibility, and internal control effectiveness had enhanced the quality of financial reporting for MFBs in Kwara State. This study recommends that microfinance banks in Kwara State enhance board knowledge, board accountability, and internal control efficacy to improve financial reporting quality.