Corporate governance mechanisms and financial reporting quality: Evidence from quoted manufacturing firms

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Abstract

This study seeks to investigate the effect of corporate governance (CG) mechanisms on the financial reporting quality (FRQ) of quoted manufacturing firms at the Uganda Securities Exchange (USE). The study uses a questionnaire survey and interviews with wide groups of stakeholders from the quoted manufacturing firms to collect data from a sample of 150 respondents. We find that ownership structure (OS) has a significantly positive effect on FRQ. In addition, a positive, insignificant effect was established between board characteristics (BC) and FRQ. Furthermore, our findings show that audit committee (AC) characteristics have a significantly positive effect on FRQ. Based on our findings, we conclude that OS and AC characteristics enhance the FRQ of the quoted manufacturing firms. It can also be concluded that the BC examined in this study positively and insignificantly affects FRQ. The study contributes to knowledge on the effect of CG mechanisms on FRQ in a relatively unexplored context of quoted firms in a developing country. The findings also have implications for regulators, standard-setters, and investors who are interested in promoting effective CG mechanisms and the value relevance of financial reporting.

Keywords: Corporate Governance Mechanisms, Financial Reporting Quality, Quoted Manufacturing Firms

Authors’ individual contribution: Conceptualization — R.O.E., G.S., and R.E.; Methodology — R.O.E. and R.E.; Formal Analysis — R.O.E, P.P.O., and B.O.; Investigation — R.O.E., G.S., and R.A.; Resources — R.O.E., G.S., R.E., P.P.O., B.O., and R.A.; Writing — Original Draft — R.O.E., G.S., P.P.O., and R.A.; Writing — Review & Editing — R.O.E., G.S., P.P.O., B.O., and R.A.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G34, M41

Received: 19.02.2025
Revised: 04.07.2025; 27.08.2025; 23.12.2025
Accepted: 09.01.2026
Published online: 13.01.2026

How to cite this paper: Etengu, R. O., Sonko, G., Ebwonyu, R., Opio, P. P., Odongo, B., & Abongo, R. (2026). Corporate governance mechanisms and financial reporting quality: Evidence from quoted manufacturing firms. Journal of Governance and Regulation, 15(1), 94–105. https://doi.org/10.22495/jgrv15i1art9