Environmental Risk and Financial Statement Quality in Nigeria’s Non-financial Sectors

The study investigated the relationship between environmental risk and financial statement quality in Nigeria’s non-financial sector. The study utilised a survey research design. The study's population comprised five thousand two hundred thirty-four (5,237) employees from thirteen (15) iron and steel industries in Lagos State, Nigeria. The research sample (400) was calculated using Multistage Sampling, including cluster, quota, and convenience procedures, and was used to deliver research instruments to respondents. The study utilised a structured questionnaire. The data was analysed using descriptive and inferential statistics through the use of Eview version 12. The study concluded that environmental risk is the most important factor influencing financial statements' quality. Furthermore, both management risk and risk control strategies have had no discernible effect on financial statement quality. The study indicated that financial statements quality is more important in predicting the outcome of a solid baseline since the non-significance of variables reveals the intricacy of the situation at hand. The study recommended that organisations should prioritise ways of addressing environmental risks, possibly through more robust environmental risk management strategies and tools; there should be a review of management risk measures to explore alternative ways to improve management's role in risk mitigation to provide a more comprehensive understanding of the factors influencing financial statements quality; and re-evaluation of risk management technology.