A Study On Departments Of Financial Reporting Quality With Reference To Private Commercial Banks In Ethiopia

Abstract

ABSTRACT newlineHigh quality financial reporting system has been focused as a result of different highprofile newlinecorporate newlinescandals newlineoccurred newlineacross newlinethe newlineworld. newlineA newlinesignificant newlinepublic newlineinterest newlineissue, newline newlinefinancial newline newlinereporting quality is a part of the regulatory and supervisory framework. This newlinestudy is initiated based on the idea of different users of financial statements gain the most newlinefrom higher-quality financial reporting. The purpose of the study was to investigate the newlineinfluence of determinant factors on the financial reporting quality evidence from sampled newlineprivate commercial banks in Ethiopia. Annual audited financial reports of banks used as newlinethe main source of data for the study. The study used data collected from eight newlinepurposively sampled private commercial banks for a period of 15 years from 2007- 2021. newlinePanel data regression methods were applied to analyze the collected data. The result of newlinethe study indicated that banks age have a favorable substantial influence on the quality newlineof financial reporting of selected private commercial banks. The financial leverage of newlinebanks is found to have insignificant influence on the quality of financial reporting. The newlineimpact of profitability of banks on the quality of financial reporting is found to be newlinepositive significant. The liquidity position of banks also has a favorable strong influence newlineon the quality of financial reporting. The result of non-performing loan is found having newlineadverse substantial association with the quality of financial reporting. The numbers of newlinedirectors included on the board, board size, have insignificant impact on the quality of newlinefinancial reporting. In addition, the result indicated that agency theory and signaling newlinetheory are the two pertinent theories to the quality of financial reporting of banking newlinesector in Ethiopia. Finally, it is suggested for the regulatory bodies to emphasize on the newlinesupervision and controlling process of newly established banks, managers to do their newlinebest to improve the profitability and liquidity position of banks, banks to review and newlinerevise