Effect of Human Capital on the Financial Reporting Quality of Listed Industrial Goods Companies in Nigeria

The study examined the effect of human capital on the financial reporting quality of listed industrial goods companies in Nigeria. The study adopted an ex-post facto research design and utilises panel data obtained from the annual reports of selected listed industrial goods companies in Nigeria over a ten-year period, yielding 130 firm-year observations. Data were analysed using panel regression techniques. The results reveal that employee size has a positive and statistically significant effect on financial reporting quality, indicating that larger workforces enhance reporting quality through improved professional competence and internal control systems. Conversely, staff cost exhibits a negative and significant relationship with financial reporting quality, suggesting that higher personnel expenditure does not necessarily translate into better reporting outcomes. Employee stock ownership shows a positive but statistically insignificant effect, implying that employee ownership structures in Nigeria are too weak to meaningfully influence reporting behaviour. The study concludes that human capital significantly influences financial reporting quality in Nigerian industrial goods firms, but the impact varies across dimensions. It recommends that firms prioritise workforce quality and efficiency over cost expansion, strengthen professional development programmes, and design more effective employee ownership schemes to improve financial reporting transparency and corporate governance.