CLOUD ACCOUNTING AND THE QUALITY OF FINANCIAL REPORTS OF SOME SELECTED FINANCIAL INSTITUTIONS IN NIGERIA

Abstract

Cloud accounting, encompassing Software Service (SS), and Internet Service (IS), has been recognized globally for improving reporting accuracy, timeliness, and accessibility. However, in Nigeria, poor IT infrastructure and inconsistent adoption raise questions about its effectiveness in enhancing financial reporting quality, which is crucial for transparency and decision making. This study examines the effect of cloud accounting on the quality of financial reports of selected banks in Nigeria. The study adopts an ex-post facto research design using secondary data obtained from the annual financial statements of fifteen purposively selected banks listed on the Nigerian Exchange Group between 2020 and 2024. The quality of financial reports was measured using a composite index of relevance, faithful representation, comparability, verifiability, and timeliness. Cloud accounting was proxied by Software Service, and Internet Service. Data were analyzed using descriptive statistics, correlation analysis, and multiple regression (Binary Probit) techniques. The findings showed that software service and internet service have significant positive effects on the quality of financial reports. The study concludes that cloud accounting adoption improves the quality of financial reports by enhancing transparency, accessibility, and reliability. The study recommended that Nigerian banks increase investment in robust cloud infrastructure to strengthen financial reporting practices and maintain stakeholders’ confidence.