Effect of Pressure Fraud Risk Factor on Fraudulent Financial Reporting of Listed Consumer Good Firms in Nigeria

Despite regulatory reforms, fraudulent financial reporting (FFR) persists among Nigerian listed firms, and the pressure drivers of this misconduct remain inconsistently understood, particularly the role of executives' personal financial needs or circumstances. This study examines the effect of four pressure fraud risk factors; financial stability, external pressure, managers' personal financial needs, and pressure to meet financial targets on FFR among consumer goods firms listed on the Nigerian Exchange Group. Anchored on the Fraud Triangle Theory, the study adopts a correlational, ex-post-facto design using panel data drawn from the audited annual reports of nineteen listed consumer goods firms (2014–2024). Fraudulent financial reporting was proxied using the Beneish M-Score, a forensic measure that more precisely isolates deliberate misstatement than conventional discretionary accrual proxies. Data were analyzed using a robust random effect generalized least squares regression, following confirmatory Hausman and Breusch-Pagan Lagrangian Multiplier tests. The results show that financial stability (β = 0.001, p < .01) and pressure to meet financial targets (β = 0.036, p = .05) significantly increase the likelihood of fraudulent reporting, while external pressure significantly reduces it (β = −0.003, p = .054). Managers' personal financial needs showed no significant effect. The findings extend the Fraud Triangle Theory further by demonstrating that firm level pressures exert stronger influence on FFR than individual level financial pressures within the consumer good institutional context. Practically, regulators and corporate boards should prioritize monitoring firm level financial distress and target setting practices rather than focusing narrowly on individual managerial compensation structures when designing fraud detection frameworks.