Effect of Financial Reporting Quality on the Efficiency of Company’s Capital Investment (a Case of Aiico Insurance Plc Ilorin)

The aim of this research is to examine the effect of financial reporting quality on corporate investment efficiency. Studying how effective a firm is in managing its investment opportunities given the worldwide economic and political instability is quite important. To the best of researcher’s knowledge, this research contributes more to wealth of knowledge on the effect of financial reporting quality on corporate investment efficiency. Also, the study examines the joint effect of corporate governance and investment efficiency on voluntary disclosure. Therefore, this study considers investment efficiency as a dependent variable and financial reporting quality as independent variable. The study also lakes the internal and external factors related to investment efficiency into consideration. Financial statements of the AIICO Insurance Plc, were used as data collection point. Descriptive statistics and correlation, OLS regression analyses are used to test the research hypotheses using E-views software. In this regression model, empirical model were adopted from past literatures and growth and size variables were entered into analysis as control variables. The results of the study highlight gaps in prior studies and provide opportunities for future research. The findings also revealed that financial reporting quality affect corporate investment efficiency. Also, it is found that financial reporting quality has a positive effect on investment efficiency and investment decision. Moreover, when introducing the joint effect of financial reporting quality and cash flow, the analysis shows that both variables have a complementary influence on investment efficiency. The findings are relevant for diverse stakeholders and could assist them in making decision