Accounting Information System Effectiveness and Financial Reporting Quality: Evidence from Listed Insurance Companies in Nigeria

Abstract

This study investigates the effect of Accounting Information System (AIS) effectiveness on financial reporting quality (FRQ) among listed insurance companies in Nigeria, while examining the moderating role of corporate governance. A quantitative research design was adopted using panel data from sixteen insurance firms listed on the Nigerian Exchange Group over the period 2013 2024. AIS effectiveness was measured using reliability, integration, and automation, while financial reporting quality was proxied by earnings quality, accrual quality, and reporting timeliness. Corporate governance was incorporated as a moderating variable. Fixed-effects regression analysis was employed, supported by Hausman tests and robustness checks. The results reveal that AIS reliability, integration, and automation each have a significant positive effect on financial reporting quality. AIS reliability exhibits the strongest influence on earnings quality, while AIS integration improves accrual quality and AIS automation enhances reporting timeliness. Furthermore, corporate governance significantly strengthens the relationship between AIS effectiveness and financial reporting quality, indicating that governance mechanisms enhance the value derived from technological accounting systems. The findings suggest that insurance firms should prioritize investment in reliable, integrated, and automated AIS infrastructure alongside strengthening governance mechanisms such as audit committees and board independence. Regulators are also encouraged to promote AIS-driven reporting standards. The study provides sector-specific evidence from Nigeria’s insurance industry and contributes to emerging market literature by integrating multiple AIS dimensions with multidimensional financial reporting quality measures within a governance-moderated framework.