The Effects of Financial Reporting on Investment Decision on Consumer Goods Sector in Nigeria

This study examines the impact of financial reporting on investment decisions within
Nigeria's consumer goods sector. It explores key financial reporting elements, including
earnings management, accounting conservatism, timeliness. and firm size, as independent
variables, with investment decisions measured by Tobin's Q as the dependent variable.
Using an ex-post facto design and secondary data from annual reports of 21 listed
companies spanning from 2015 to 2023, the study employs regression analysis to evaluate
the relationships between the variables.
The findings reveal that accounting conservatism and firm size significantly and
positively influence investment decisions, emphasizing the importance of transparent and
cautious financial reporting practices. In contrast, earnings management and timeliness
show no significant effects, suggesting sector-specific dynamics and potential
inefficiency
in Nigeria's consumer goods market. These results highlight the critical role
of financial reporting quality in enhancing investor confidence and market efficiency. The
study concluded that high-quality financial reporting is essential for investment efficiency,
the study recommends adopting conservative accounting practices, enhancing regulatory
compliance, and improving reporting timeliness. It also advocates for investment
education and incentives for innovative reporting practices to meet international standards.