Determinants of Financial Reporting Quality: Evidence from Large Manufacturing Share Companies of Addis Ababa
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Date
2016-05
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Addis Ababa University
Abstract
This study intends to assess the determinants of financial reporting quality in large
manufacturing share company’s in Addis Ababa. Accordingly, the study used
documentary analysis of companies’ audited financial statements and in depth
interview with directors/officials of manufacturing firms. Using simple random
sampling method, the study selected a sample of fourteen (14) companies to study
them for the period of five years (2010-2014) with the total of 70 observations.
The results of panel least square regression analysis show that: Firm Profitability,
Type of Auditor and Share Dispersion, have statistically significant and positive
relationship with manufacturing share companies’ financial reporting quality. On
the other hand, Firm Size has a negative and statistically significant relationship with
manufacturing share companies’ financial reporting quality. The study suggests,
stakeholdersto consider intensive investigation and internal control for low
performance and large firm size respectively, further, employing large audit firms
improve the quality of information produced.
Keywords: financial reporting quality, firm specific attributes, earning management,
discretionary (abnormal) accrual
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Keywords
Evidence from large manufacturing