Corporate Governance and the Quality of Financial Statement of Selected Small and Medium Enterprises in Edo State

This study examines the relationship between corporate governance mechanisms and the quality of financial statements of selected Small and Medium Enterprises (SMEs) in Edo State, Nigeria. The research focuses on specific corporate governance mechanisms, including board size, audit committee, board tenure, board gender, and board discipline. The study employs a survey research design, collecting data from a sample of 384 SMEs in Benin City, Edo State. Data analysis involves descriptive statistics and inferential statistics, including correlation and regression analysis. The findings of the study indicate a significant positive relationship between board size and the quality of financial statements. This suggests that larger boards may enhance the quality of financial reporting by providing greater oversight and expertise. Additionally, the study reveals a significant positive relationship between the audit committee and the quality of financial statements. This finding underscores the importance of effective audit committees in ensuring the accuracy and reliability of financial information. However, the study did not find significant relationships between board tenure, board gender, and board discipline with the quality of financial statements. These findings suggest that while board size and audit committee effectiveness are crucial for improving financial reporting quality, other corporate governance mechanisms may not have a significant impact on SMEs in the context of Edo State. The implications of these findings for policymakers, regulators, and practitioners are discussed. The study recommends that large board size be provided to enhance corporate governance practices and improve the quality of financial statements in SMEs.