Impact of cloud accounting financial reporting quality of commercial banks in Nigeria

Abstract

The study examined the effect of cloud accounting on financial reporting quality of commercial banks in Nigeria. The specific objectives were to examine the effect of cloud accounting infrastructure and cloud accounting software on earnings quality of listed commercial banks in Nigeria. This study adopted an ex-post facto research design. The population of this study comprised the thirteen (13) commercial banks listed on the Nigerian Exchange Group (NGX) as at 2024. Purposive sampling was employed to select the seven (7) banks that made up the sample constituents, with the selection criterion being that the bank must possess an international authorization. Secondary data were obtained from the audited annual reports and financial statements of the sampled commercial banks covering the period 2015 to 2024. Descriptive statistics was used to summarize the mean, standard deviation, minimum, and maximum values of all variables. Test of hypotheses was conducted using panel least squares regression at 5% significance level. The study found the following: cloud accounting infrastructure has a positive but non-significant effect on earnings quality (β = 1.5606, p = 0.2233); cloud accounting software has a significant negative effect on earnings quality (β = -34.9358, p = 0.0371). the study concluded that, cloud accounting, significantly affect earnings quality while transformative, is not inherently beneficial or harmful to earnings quality; its real effect depends on how it is deployed, managed, and aligned with the broader objectives of truthful and reliable financial reporting in practice. Given that cloud accounting software demonstrated a significant negative effect on earnings quality, it is recommended that software developers and vendors providing cloud accounting solutions undertake a comprehensive review of their software’s functionalities, interface, and error-handling capabilities which should focus on identifying features or processes that may lead to data inconsistencies, misclassifications, or reporting delays, and redesigning them to enhance transparency and accuracy.

Keywords: Cloud Accounting, Financial Reporting Quality, Cloud Accounting Infrastructure, Cloud Accounting Software, Earnings Quality.