Effect of Financial Statement Quality on Investment Decisions of Quoted Deposit Money Banks in Nigeria

Abstract

This study sought to ascertain the effect of Financial Statement Quality on Investment Decisions of quoted Deposit Money Banks (DMBs) in Nigeria from 2010-2019. Specifically, this study examined the effect of Financial Statement Verifiability, Financial Statement Timeliness, and Financial Statement Understandability on Return on Equity. Ex-Post Facto research design was employed while secondary data were collected from a sample of seven (7) DMBs. Inferential statistics using Pearson correlation and Ordinary Least Square (OLS) regression analysis were applied in order to achieve the study objectives. Results of this study found that Financial Statement Verifiability, Financial Statement Timeliness, and Financial Statement Understandability have a significant positive effect on Return on Equity of quoted Deposit Money Banks in Nigeria at a 5% level of significance respectively. This study recommended among others that organizations should ensure that financial statements are published to encourage new investors and facilitates the building of public confidence in the enterprises concerned.

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