OWNERSHIP COMPOSITION AND ACCOUNTING CONSERVATISM IN NIGERIAN QUOTED MANUFACTURING COMPANIES

Abstract

Accounting practitioners debated that conservatism had greatly increased the recognition of losses and decreased recognition of revenue. The phenomenon is very dynamics to shareholders as it helps in improving accounting information made available to users of financial statements in order to reduce the asymmetric information between managers and institutional investors. The objective of the study is to examine relationship between institutional ownership, block ownership and accounting conservatism in Nigeria quoted companies. The longitudinal research design was adopted, and the population comprised of quoted manufacturing companies in the Nigerian Stock Group. Secondary data were collected from annual report of quoted manufacturing companies while simple random sampling technique was employed to sample 36 quoted manufacturing companies in the Nigerian Stock Group that have consistently published their annual audited financial report from the period of 2012 to 2021 and analyzed using descriptive statistics, correlation analysis and robust regression technique. The results showed that institutional ownership exerts a positive and significant relationship with accounting conservatism at 5% level of significance and block ownership exerts a negative and insignificant relationship with accounting conservatism at p-value >0.05. The study recommends that quoted manufacturing companies should engage more institutional investors for improving conservatism of accounting information for quality financial reporting. The study suggested further that other ownership composition variables like government ownership and family ownership might improve accounting conservatism.