Stakeholder Engagement and Financial Reporting Quality in Nigeria

Financial reporting quality remains a persistent governance challenge in Nigeria's capital market, where information asymmetries and stakeholder exclusion continue to undermine investor confidence and economic accountability. This study investigates how stakeholder engagement contributes to financial reporting quality among 151 listed firms on the Nigerian Exchange Group (NGX) over the period 2011-2025. Drawing on agency theory, stakeholder theory, and legitimacy theory, the study adopts an ex-post facto research design and employs panel regression techniques - including fixed effects, random effects, and system generalised method of moments (GMM) - to examine the relationship between stakeholder engagement and financial reporting quality. Seven control variables are incorporated: firm size (FS), industry type (INDT), leverage (LEVG), growth opportunities (GROW), auditor type (AUDT), board size (BOSI), and board independence (BIND). Financial reporting quality is proxied by accruals quality, earnings persistence, timeliness, and a composite disclosure index. The findings reveal that stakeholder engagement exerts a significant and positive influence on financial reporting quality, with auditor type and board independence emerging as the strongest moderating controls. These results are robust across multiple post-estimation checks, including the Hausman test, the Breusch-Pagan LM test, the Wooldridge serial correlation test, and the modified Wald heteroskedasticity test. The study contributes empirical and policy insights to the ongoing discourse on corporate governance reform and transparency in sub-Saharan Africa, with direct implications for regulators, firms, and investors operating in Nigeria.