This research explores the relationship between the quality of financial reporting and the financial performance of manufacturing companies in Ibadan, Oyo State, Nigeria. Given the importance of financial reporting in shaping business outcomes, the study aims to investigate how the quality of financial reporting affects key financial metrics, including return on assets (ROA), return on equity (ROE), and profit after tax (PAT). The study was anchored on two theories: Decision Usefulness Theory and the Theory of Double Entry Bookkeeping. It employed a structured survey with 50 respondents from various manufacturing companies and used Pearson Correlation and multiple regression analysis to assess the relationships between financial reporting quality and financial performance. The results showed that the respondents strongly emphasized the importance of accurate, transparent, and ethical financial reporting in relation to return on assets, asset management, and attractiveness to investors. The research questions revealed that respondents placed significant importance on financial reporting's impact on equity investment decisions and return on equity, with a weighted mean of 3.22. For profitability, including profit after tax, investor confidence, stock prices, and decision-making, respondents agreed that transparent financial reporting positively impacts these factors, with a weighted mean of 2.94. Correlation analyses showed significant positive correlations between financial reporting quality and ROA (0.412), ROE (0.691), and PAT (0.380), with statistical significance at p < 0.01. Based on these findings, the study concludes that highquality financial reporting plays a vital role in improving the financial performance of manufacturing companies. It is recommended that companies prioritize the quality of their financial reporting by ensuring transparency, accuracy, and ethical conduct. Regulatory bodies should actively enforce compliance with reporting standards and provide guidance to promote high-quality financial reporting practices.
Oyeneye et al. (Mon,) studied this question.