ASSESSMENT OF THE RELATIONSHIP BETWEEN BOARD DIVERSITY AND THE RELIABILITY OF FINANCIAL REPORTING QUALITY OF SELECTED NIGERIAN DEPOSIT MONEY BANKS

Abstract

In today’s rapidly evolving financial environment, corporate governance has gained increasing attention due to its crucial role in maintaining transparency, accountability, and trust in financial reporting. Despite these positive developments, the extent to which board diversity affect reliability of Financial Reporting Quality (FRQ) remains a subject of concern among participant in Nigerian Deposit Money Banks (NDMBs) sector. This study examined the nexus between board diversity and the reliability of financial reporting quality of selected Nigerian deposit money banks. The study employed survey research design using structured questionnaire. The population of the study comprised of senior staff of accounting departments of selected NDMBs from where a sample of seven (7) banks were purposively selected based on ease of data collection. The respondents include twelve (12) senior staffs in the account departments of each of the sampled banks to give 84 respondents. Both descriptive and inferential statistics were employed for the purpose of the data analysis. Descriptive statistics include frequency tables and percentage count while inferential statistics such as  Pearson Product Moment Correlation (PPMC) was used to examine the relationship between board diversity and the reliability of FRQ of the selected NDMBs.  Findings from the result of PPMC showed that the board diversity high correlation coefficient (r=0.881) indicates a very strong positive relationship between overall board diversity and the reliability of FRQ. Based on the summary of findings of this study, it was concluded that board diversity significantly influences the reliability of financial reporting quality in NDMBs.  It is therefore recommended that NDMBs should actively promote gender and ethnic diversity within their boards. Policies and practices that encourage the inclusion of diverse perspectives can enhance the reliability of financial reporting. Also, recruiting board members with diverse educational backgrounds can provide a broader range of expertise and viewpoints, contributing to more robust and reliable financial oversight.