Moderating Effect of Board Expertise on the Relationship Between Intellectual Capital Disclosure and Financial Reporting Quality of Listed DMBS in Nigeria

Abstract

This study examined the moderating effect of board expertise on the relationship between intellectual capital disclosure and financial reporting quality of listed DMBS in Nigeria for the period 2016 to 2025. Intellectual capital, comprising human, structural, and relational capital, has become a key driver of organisational performance in today’s knowledge-based economy. The study adopts an ex-post facto research design and utilises secondary data obtained from the annual reports of all 13 industrial goods companies listed on the Nigerian Exchange Group (NGX). A census approach was employed, and panel regression techniques were used to analyse the relationship between intellectual capital proxies and financial reporting quality. Financial reporting quality was measured using accounting-based indicators, while intellectual capital was operationalised using employee size, intellectual capital property, cash receipts from customers, and business expenses. The results reveal that employee size has a positive and statistically significant effect on financial reporting quality, indicating the importance of human capital in enhancing transparency and compliance with reporting standards. Intellectual capital property and business expenses show positive but insignificant relationships, while cash receipts from customers exhibit a significant negative effect on reporting quality. The interaction effects between intellectual capital variables and business expenses were largely insignificant. The study concludes that human capital is the most influential component of intellectual capital in improving financial reporting quality of listed DMBS in Nigeria. It recommends increased investment in employee development, improved disclosure frameworks, and stronger regulatory guidelines to enhance transparency and accountability in corporate reporting.