Financial reporting quality motivates the economic decisions of stakeholders and attracts investors to the organization. Current financial reporting practices are criticized for being of poor quality because of inherent agency conflicts, information asymmetry and fraudulent financial reporting that have resulted in wrong investment decisions and corporate failures. This study therefore evaluated the effect of Internal Audit Function (IAF) on financial reporting quality as proxied by relevance and faithful representation of financial information of listed manufacturing companies in Nigeria. The study adopted survey research design. The population comprised 1,192 senior staff members in the accounting, internal audit, board members and audit committee members of the 56 manufacturing companies listed in the Nigerian Stock Exchange. Convenience sampling technique was used to select a sample of 330 respondents determined using Taro Yamane?s formula. Three hundred and thirty copies of a structured and validated questionnaire were administered to respondents and 277 were retrieved. representing 84% response rate. Cronbach?s alpha reliability coefficients for the constructs ranged from 0.72 to 0.89. Data were analyzed using descriptive and inferential (multiple regression) statistics. Findings revealed that IAF exerted a significant effect on relevance (Adj.R2 = 0.143, F(5, 271) = 10.240, p ? 0.05) and faithful representation (Adj.R2 = 0.159, F(5, 271) = 11.444, p ? 0.05) of financial reporting. This study concluded that internal audit function enhanced financial reporting quality of listed manufacturing companies in Nigeria. The study recommended that the Financial Reporting Council of Nigeria and the Securities and Exchange Commission should enforce the disclosure of internal audit reports and management responses to it, in order to enhance the relevance and faithful representation of financial reporting.

Financial reporting quality

Financial reporting risk

Faithful representation

Internal audit function

Relevance