Effect of corporate social responsibility disclosure on financial reporting quality of deposit money banks in Nigeria

Abstract

The study examined the effect of Corporate Social Responsibility (CSR) disclosure on financial reporting quality (FRQ) of listed commercial banks in Nigeria. The objective of the study was to investigate the effect of various dimensions of CSR disclosure such as Environmental CSR (ECSR), Social CSR (SCSR), and Board Gender Diversity (BGD), on the financial reporting quality of listed banks in Nigeria. Alongside these variables, the study employed firm size (FSIZE) and return on assets (ROA) as control variables. The study covered a period of 10 years ranging from 2015–2024. The study employed descriptive and inferential statistical tools in analyzing the secondary data sourced from the annual and sustainability reports of the sampled banks. The hypotheses stated were tested using the Ordinary Least Squares (OLS) regression model. The study findings revealed that ECSR, SCSR, BGD, FSIZE, and ROA maintained weak and statistically insignificant relationships with financial reporting quality of listed banks in Nigeria. The study concluded that despite theoretical emphasis on the importance of CSR disclosure in improving financial transparency and reducing information asymmetry, these variables were found to have limited direct effects on financial reporting quality in the Nigerian banking context.

Keywords: Financial Reporting Quality, CSR Disclosure, Firm Size, Return on Assets.