Whistleblowing Policy and Financial Reporting Quality: Evidence from Nigerian Publicly Listed Companies

This study investigates the influence of whistleblowing policy on financial reporting quality (FRQ) among publicly listed companies in Nigeria. Although whistleblowing is intended to reduce information asymmetry and expose financial misconduct, its effectiveness may depend on the institutional and organisational conditions under which reporting mechanisms operate. Using a quantitative cross-sectional survey, data were obtained from 109 internal audit professionals in Nigerian publicly listed companies and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The measurement model demonstrated acceptable reliability and convergent and discriminant validity. The structural model showed a weak positive but statistically insignificant relationship between whistleblowing policy and FRQ (β = 0.035, t = 0.457, p = 0.600), and the hypothesis was therefore not supported. Consistent with Agency Theory, the finding indicates that a formal governance mechanism does not automatically reduce information asymmetry or managerial opportunism unless it is trusted, accessible, protected, and effectively enforced. The study contributes evidence from an emerging-market institutional setting and distinguishes policy adoption from policy effectiveness. It recommends that regulators, boards, and audit committees evaluate the operation and outcomes of whistleblowing systems rather than their formal existence alone.

Whistleblowing policy, financial reporting quality, corporate governance, publicly listed companies, Nigeria.

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