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The Effects of Corporate Governance Mechanisms on Earnings Management of Listed Firms in Nigeria

Author

Listed:
  • Uwalomwa Uwuigbe

    (Covenant University, Nigeria)

  • Daramola Sunday Peter
  • Anjolaoluwa Oyeniyi

    (Southwestern University, Nigeria)

Abstract

This study basically examined the effects of corporate governance mechanism on earnings management in Nigeria. To achieve the objectives of this study, a total of 40 listed firms in the Nigerian stock exchange market were selected and analyzed for this study using the judgmental sampling technique. The choice of the selected firms arises based on the nature and extent of corporate financial failures and scandals that has been withnessed in the industry overtime. Also, the corporate annual reports for the period 2007-2011 were used for the study. The regression analysis method was employed as a statistical technique for analysing the data collected from the annual report of the selected firms. Findings from the study revealed that while board size and board independence have a significant negative impact on earnings management (proxied by discretionary accruals); On the other hand, CEO duality had a significant positive impact on earnings management for the sampled firms in Nigeria. Hence the paper concludes that firms with larger boards and diverse knowledge are more likely to be more effective in constraining earnings management than smaller boards since they are likely to have more independent directors with more corporate or financial expertise.

Suggested Citation

  • Uwalomwa Uwuigbe & Daramola Sunday Peter & Anjolaoluwa Oyeniyi, 2014. "The Effects of Corporate Governance Mechanisms on Earnings Management of Listed Firms in Nigeria," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(1), pages 159-174, March.
    • Handle: RePEc:ami:journl:v:13:y:2014:i:1:p:159-174
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    Citations

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    Cited by:

    1. Neeraj K. Sehrawat & Amit Kumar & Nandita Lohia & Satvik Bansal & Tanya Agarwal, 2019. "Impact of Corporate Governance on Earnings Management: Large Sample Evidence from India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(12), pages 1335-1345, December.
    2. Ladini, Mark Juliana & Associate Professor ORBUNDE, Bemshima & Dr. Daniel Emmanuel Kayode, 2024. "Effect of Board Size and Board Meeting Frequency on Environmental Disclosure of Listed Manufacturing Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(1), pages 236-254, January.
    3. Ionelia-Alexandra Feldioreanu & Crina Seria, 2015. "Corporate Governance Disclosure of Banks in Romania and Malaysia and the Quality of the Web Sites," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 14(1), pages 193-216, March.
    4. Ali Meftah Gerged & Khaldoon Albitar & Lara Al‐Haddad, 2023. "Corporate environmental disclosure and earnings management—The moderating role of corporate governance structures," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2789-2810, July.
    5. NURHAYATI, Puji, 2021. "The Role Of Corporate Governance In Managing Small Income In Indonesian State-Owned Enterprise," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 25(1), pages 78-94, March.
    6. Peterson K. Ozili, 2021. "Corporate governance research in Nigeria: a review," SN Business & Economics, Springer, vol. 1(1), pages 1-32, January.
    7. Temitope Esther OYENEYE & Mathew Idowu ABIMBOYE & Foluke Rachael ODUWOLE & Uwalomwa UWUIGBE, 2023. "Ifrs Adoption And Earnings Management Practices: Evidence From Nigerian Listed Consumer Goods Companies," Business & Management Compass, University of Economics Varna, issue 4, pages 286-297.
    8. Eman F. Attia & Tariq H. Ismail & Messaoud Mehafdi, 2022. "Impact of board of directors attributes on real-based earnings management: further evidence from Egypt," Future Business Journal, Springer, vol. 8(1), pages 1-22, December.
    9. Ozili, Peterson K, 2020. "Corporate governance research in Nigeria: a review," MPRA Paper 98217, University Library of Munich, Germany.

    More about this item

    Keywords

    corporate governance; earnings management; ceo duality; board size; discretionary accruals;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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