Do Board Size and Independence Affect Financial Reporting Quality of Government Statutory Entities in Nigeria?

This study examines the effect of board size and board independence on the financial reporting quality of statutory entities in Nigeria. Using an ex-post facto research design, data were collected from the audited financial statements of 20 revenue generating statutory entities from 2016 to 2021. The study employed Panel Least Squares (PLS) regression analysis to test the hypotheses. Findings reveal that board size has a significant but negative effect on financial reporting quality, suggesting that larger boards reduce governance effectiveness and hinder financial transparency. Similarly, board independence negatively and significantly affects financial reporting quality, indicating that a higher proportion of independent directors does not necessarily enhance financial oversight. This result may be attributed to political appointments of non-executive directors, weakening their monitoring role. The study contributes to corporate governance literature by providing empirical evidence on the governance dynamics in public sector entities. It recommends reducing board size to an optimal number, limiting politically influenced independent board appointments, and strengthening governance regulations to improve financial accountability. These findings have policy implications for the Federal and State governments in enhancing financial reporting transparency and public sector governance.