Derivative Risk Information Disclosure Effect on Financial Reporting Quality Evidence from Selected Listed Deposit Money Banks in Nigeria

Andrew, A. Ugbah *

Department of Accounting and Finance, University of Delta, Agbor, Delta State, Nigeria.

Fidelis, U. Amahi

Department of Accounting and Finance, University of Delta, Agbor, Delta State, Nigeria.

Offor, Nkechi T.

Department of Accountancy, Chukwuemeka Odimegwu Ojukwu University, Anambra State, Nigeria.

*Author to whom correspondence should be addressed.


This study investigates the impact of financial derivative risk information disclosure on the quality of financial reporting in a sample of Nigerian deposit money banks. Data from the annual financial reports of twelve Nigerian listed commercial banks were collected over a ten-year period, from 2012 to 2021. While derivative assets served as the proxy for the independent variable, Jones Discretionary Accrual was employed to measure reporting quality and cash flow to asset ratio was employed as control variable. The hypothesis was tested using Pooled Ordinary Least Square regression analysis technique whose result indicate that disclosure of financial derivative risk information leads to an increase in discretionary accrual value, thereby undermining the quality of financial reports. As a result of this finding, the study concludes that disclosing financial derivative risk information has a negative impact on the quality of financial reports issued by Nigerian deposit money banks. It therefore recommends that policymakers work with regulatory bodies and standard-setting organizations to establish standardized disclosure practices for derivative instruments among Nigerian deposit money banks.

Keywords: Financial derivative risk, financial reporting quality, jones discretionary accrual

How to Cite

Ugbah , A. A., Amahi , F. U., & Offor, Nkechi T. (2023). Derivative Risk Information Disclosure Effect on Financial Reporting Quality Evidence from Selected Listed Deposit Money Banks in Nigeria . Journal of Economics, Management and Trade, 29(11), 1–11.


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