Business Studies

Business Studies

public trust and financial reporting gap: evidence from underlined ethical issues

Volume: 56  ,  Issue: 1 , July    Published Date: 20 July 2020
Publisher Name: IJRP
Views: 73  ,  Download: 29
DOI: 10.47119/IJRP100561720201315

Authors

# Author Name
1 Owolabi Sunday .A.
2 Omotilewa Olufemi .O.

Abstract

Ensuring highest standards of ethics is crucial in preparing financial reports. Shareholders, potential shareholders and other users of the Financial statements rely heavily on the yearly financial statements to make investment decisions. Many studies have been carried out to address the ethics of accounting and Financial reporting but few have considered the effect of lapses in ethical issues on public trust. The study adopted the explorative research design using primary data. The target audience for the study comprised professional accountants and audit firms in Lagos as at May 2020. The results showed that there is a strong positive correlation between public trust and quality of Financial reporting (r= .959, n=.155,p=.005); there is a strong positive association between truthfulness and fairness and quality of Financial reporting (r=.649, n=155, p=.005); that the ethical code and the activities of professional accountants have a statistical significant linear relationship (r=.897, n=155, p=.005), and that there is a strong and positive linear association between quality of reporting and stakeholders level of decision making (r=.762, n=155, p=.000). The study concludes that ethical consideration and competence of professional accountant positively and significantly influenced quality of financial reporting which in turn would increase the public trust. The study recommended that Accountants must exhibit truthfulness and fairness in the practice of ethical codes and that financial reporting rules must being strengthened to make financial reporting process transparent and conducive to all stakeholders.

Keywords

  • public trust
  • Investments
  • ethics
  • stakeholders
  • financial reporting
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