Effect of Ownership Structure on Financial Reporting Quality of Listed Oil and Gas Firms in Nigeria

The study conducted a fixed-effect regression analysis based on Hausman specification to examine the relationship between ownership structure and financial reporting quality in a sample of oil and gas firms in Nigeria. The study used a longitudinal research design; the population of this study consists of the 9 listed oil and Gas on the floor of the Nigeria Exchange Group as of 2022, and the census samples are to be used to sample for data from their annual reports for the period 2013 to 2022. The sample size became the population of the study since it was relatively small. Secondary data was extracted from the annual report of the listed oil and gas firms in Nigeria. The study utilizes multiple panel regression with the aid of STATA 17 to analyses the data. The results revealed several significant findings. Firstly, managerial ownership was found to have a negative impact on financial reporting quality, suggesting that higher levels of managerial ownership were associated with lower-quality reporting. Secondly, foreign ownership did not show a significant relationship with financial reporting quality, suggesting that foreign ownership had no discernible impact on reporting practices. On the other hand, institutional ownership and ownership concentration were positively associated with financial reporting quality, indicating that higher levels of both institutional ownership and ownership concentration were linked to higher-quality reporting. The study, therefore, concluded that ownership structure has a significant effect on the financial reporting quality of listed oil and gas firms in Nigeria. The study, therefore, recommends that it should enhance Corporate Governance Practices; given the negative impact of managerial ownership on financial reporting quality, it is important for firms to strengthen corporate governance mechanisms. This could include implementing stricter monitoring and oversight mechanisms, ensuring independent board representation, and aligning the interests of managers with those of shareholders through appropriate incentive structures.