The Effect of Financial Reporting Quality on Stakeholders' Trust in Firms in Soba LGA
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- 1-5 Chapters
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- Table of Content: Available
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- NGN 5000
Background of the Study
Financial reporting plays a crucial role in ensuring transparency and accountability in business operations. In Soba LGA, stakeholders such as investors, regulators, and customers rely on the quality of financial reports to make informed decisions. Poor-quality financial reporting can erode trust in firms, negatively affecting their reputation and business performance. This study will examine the relationship between the quality of financial reporting and the trust of stakeholders in firms operating in Soba LGA.
Statement of the Problem
Soba LGA has witnessed cases of financial misreporting and irregularities in firms, which has led to a decline in stakeholder confidence. Inconsistent, inaccurate, or delayed financial reports can create an environment of distrust and miscommunication between firms and their stakeholders. This study aims to assess how the quality of financial reporting impacts stakeholders' trust in firms and provides recommendations for improving reporting practices.
Aim and Objectives of the Study
1. To evaluate the effect of financial reporting quality on stakeholders' trust in firms in Soba LGA.
2. To examine the key factors that influence the quality of financial reporting in firms.
3. To recommend measures for enhancing the quality of financial reporting to foster trust among stakeholders in Soba LGA.
Research Questions
1. How does the quality of financial reporting impact stakeholders' trust in firms in Soba LGA?
2. What are the key factors influencing the quality of financial reporting in firms in Soba LGA?
3. How can firms improve their financial reporting practices to enhance stakeholder trust?
Research Hypotheses
1. H₀: There is no significant relationship between the quality of financial reporting and stakeholders' trust in firms in Soba LGA.
2. H₀: The factors influencing the quality of financial reporting do not significantly affect stakeholders' trust in firms.
Significance of the Study
This study will contribute to a better understanding of the importance of financial reporting quality in building stakeholder trust. The findings will be useful for business managers, regulators, and policymakers in improving financial reporting standards and strengthening trust in firms in Soba LGA.
Scope and Limitation of the Study
The study will focus on firms operating in Soba LGA and their financial reporting practices. Limitations may include difficulties in obtaining data on firms’ internal reporting practices and potential bias in stakeholder responses.
Definition of Terms
• Financial Reporting Quality: The degree to which financial reports are accurate, reliable, and transparent, reflecting a firm’s true financial position.
• Stakeholders: Individuals or groups who have an interest in a firm’s operations, including investors, customers, regulators, and employees.
• Trust: The reliance on the integrity, credibility, and reliability of a firm's financial information.
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