The moderating role of reported earnings quality on the relationship between intellectual capital disclosure and return on assets of listed non-financial companies on the Nigerian exchange

This study examined the effect of intellectual capital (IC) disclosure on return on assets (ROA) of non-financial firms listed on the Nigerian Exchange Group (NGX), with reported earnings quality as a moderating variable. The study employed panel data sourced from the annual reports and accounts of 75 purposively selected non-financial firms across ten sectors of the NGX over the period 2010 to 2024, yielding 1,125 firm-years observations. IC disclosure was decomposed into humasn capital disclosure index (HCDI), structural capital disclosure index (SCDI), and relational capital disclosure index (RCDI), while reported earnings quality (REQ) was proxied through the Modified Jones Model.  ROA served as the dependent variable, with firm size and firm age included as control variables. Data were analysed using the system Generalised Method of Moments estimator, which was adopted on the grounds of its robustness to non-normality, heteroscedasticity, endogeneity, and unobserved firm-level heterogeneity inherent in the panel structure. The results revealed that RCDI exerts a significant positive effect on ROA, while HCDI and SCDI recorded significant negative effects in the baseline specification. REQ directly and positively influences ROA, and significantly moderates the relationship between HCDI and ROA, as well as between RCDI and ROA, though its moderating effect on SCDI is insignificant. The study concludes that IC has a significant effect on ROA. It recommends that firms prioritise verifiable relational capital disclosures and strengthen earnings quality through robust internal controls to improve asset utilisation and operational profitability.