Abstract

Recent financial crises and global corporate failures have been attributed to inadequate provision of
information to investors. This study determined the effect of mandatory disclosures of accounting
information on investment decisions in consumer goods sector of the Nigerian economy. Positive
Accounting Theory and Portfolio Theory were reviewed as theoretical foundation for this study.
Data were collected from audited financial reports of 8 out of 22 firms in consumer goods sector
listed on Nigerian Stock Exchange as of 2016 for 10 years period from 2007 to 2016, using
purposive judgment sampling. Pre-estimation and post estimation tests were conducted on the series
and the final regression estimate was made. The Hausman test results favor the adoption of random
effect models without control variables, while models with control variables indicated the
appropriateness of fixed effect using Breusch-Pagan Lagrangrian Multiplier test. Both models
confirmed the presence of heteroscedasticity and robust standard errors were used to estimate them
to avoid estimation bias. The probability value for Wooldridge tests for autocorrelation at 0.67 and
0.07, for volume of share traded and market value of shares respectively, confirmed absence of first
order autocorrelation. Final regression analysis shows that both IFRSDI and RinDI at 146.75(p =
0.00) and 825.53(p = 0.00) for volume of shares traded and market value of shares respectively,
have positive and significant relationship with investment decisions in consumer goods sector of
Nigerian economy. The study concluded that accounting information disclosures are among
determinants of investment decisions in consumer good sectors in Nigeria. It was recommended that
investors should always demand adequate disclosure of accounting information by corporate
entities in Nigeria before investing in those companies.