The Impact of the 2023 FRCN Regulatory Amendment on the Quality of Corporate Reporting in Nigeria

Abstract

This study investigates the effects of the Financial Reporting Council of Nigeria (FRCN) regulatory amendment on the quality of corporate reporting in Nigeria. The amendment introduced significant changes, including tougher penalties for non-compliance, improved guidance on internal control over financial reporting (ICFR), and reforms to corporate governance, intended to improve the quantitative aspects of corporate reporting, particularly the faithful representation of financial statements. Faithful representation is a fundamental qualitative characteristic of financial reporting, requiring that information be complete, neutral, and free from error. The study calls for an evaluation of whether the 2023 amendment actually enhanced corporate reporting reliability and whether further amendments are needed. Structured questionnaires were used as primary data collection methods to people involved in preparing the financial statements and included auditors, accountants, and compliance officers. Descriptive statistics, correlation, and multiple regression analyses were used to determine the relationship between the reforms and the reliability of corporate reporting. Results indicated the amendment has positively and significantly influenced the faithful representation of financial statements with sanctions and ICFR demonstrating the strongest impact, and governance reforms with a moderate, yet positive impact. This paper concludes that the FRCN amendment 2023 has enhanced the quality of corporate reporting and thus increased the trust of stakeholders in financial reporting. It suggests that compliance should be enforced more strongly by regulatory bodies, organisations should enhance internal controls and additional reforms should be reviewed to deal with existing gaps. Further studies ought to be conducted on the analysis of other industries and the long-term impact of the amendment.