IDEAS home Printed from https://ideas.repec.org/a/apb/jabsss/2017p1-9.html
   My bibliography  Save this article

Corporate governance mechanisms and earnings management in Nigerian food product companies

Author

Listed:
  • Igodo Ogbonnaya Eze

    (Department of Accountancy, Jigawa State Polytechnic Dutse, Nigeria)

Abstract

One of the major challenges facing investors now is how to mitigate earnings management. Therefore, this research paper tries to find out whether this can be achieved through the application of corporate governance mechanisms. A sample of six (6) firms was selected out of eleven (11) firms in the Nigerian food product firms. The data were sourced from yearly report and account of selected firms for a period of twelve years (12), starting from 2003 to 2014. Descriptive statistics and correlation technique were employed in the analysis of data collected. A panel data regression technique was used because the data had time series and cross sectional attributes. It was found that board meeting has negative impact on earnings management; board gender and institutional ownership have negative relationship with earnings management while audit committee meeting has positive impact on earnings management. Size of the firm which is the control variable has positive effect on earnings management. The findings support the application of corporate governance principles as they motivate institutions to ensure that earnings management practice in Nigerian food product firms is adequately supervised. The study adopts agency theory which believes in bringing managers and shareholders to have a common understanding, thereby reducing agency cost. Therefore, the study recommends that institutional shareholdings should be encouraged as this would help to reduce the extent of earnings management in Nigerian food product firms.

Suggested Citation

  • Igodo Ogbonnaya Eze, 2017. "Corporate governance mechanisms and earnings management in Nigerian food product companies," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 3(1), pages 1-9.
  • Handle: RePEc:apb:jabsss:2017:p:1-9
    DOI: 10.20474/jabs-3.1.1
    as

    Download full text from publisher

    File URL: https://tafpublications.com/platform/Articles/full-jabs3.1.1.php
    Download Restriction: no

    File URL: https://tafpublications.com/gip_content/paper/Jabs-3.1.1.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.20474/jabs-3.1.1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    2. Vafeas, Nikos, 2000. "Board structure and the informativeness of earnings," Journal of Accounting and Public Policy, Elsevier, vol. 19(2), pages 139-160, June.
    3. repec:lje:journl:v:19:y:2015:i:1:p:135-155 is not listed on IDEAS
    4. Shleifer, Andrei & Vishny, Robert W, 1986. "Large Shareholders and Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 461-488, June.
    5. Mirna Dianita, 2015. "Role of the Internal Auditor Influence and Good Corporate Governance in Banking Financial Performance Against State Owned Corporation," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 1(4), pages 176-179.
    6. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, vol. 88(2), pages 207-211, May.
    7. Aysha S. Latif & Fahad Abdullah, 2015. "The Effectiveness of Corporate Governance in Constraining Earnings Management in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(1), pages 135-155, Jan-June.
    8. Jetlaksana Seneewong Na Ayutthaya & Sudarat Tuntivivat & Ujsara Prasertsin & Victoriia Alekhina, 2016. "The effect of positive psychological capital and Organizational climate on service quality: The mediation role of work engagement of hotel service employees in Ratchaburi province," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 2(4), pages 167-176.
    9. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 18(6), pages 605-628, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hidayat Asep Tarman & Soeaidy Mohammad Soleh & Arisman Ari & Taufiq Adhitya Rahmat, 2019. "Leveraging Brand Equity by Applying Brand Communication and Forming City Branding Based on Unique Selling Proposition (A Case of Crafts City)," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 5(2), pages 74-83.
    2. Rocel A. Apolonio∗, 2020. "Behavioral and Demographic Antecedents to Household Food Waste," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 6(2), pages 32-43.
    3. Maliki Christopher I.∗ & Oniha Mabel O. & Odion Howardson A. O., 2018. "Citizenship and the Quest for National Integration in Nigeria," International Journal of Humanities, Arts and Social Sciences, Dr. Mohammad Hamad Al-khresheh, vol. 4(2), pages 60-66.
    4. Tariq Mehmood & Inzamam Ul Haq & Asad Rauf & Rosa Fitriana & Buthina Alobidyeen, 2020. "Impact of Corporate Social Responsibility on Financial Performance of the Banks: Case of Banking Sector in Pakistan," International Journal of Business and Economic Affairs (IJBEA), Sana N. Maswadeh, vol. 5(6), pages 311-320.
    5. Rindu Rika Gamayuni, 2020. "Accounting information technology and village finance management in Indonesia," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 6(1), pages 01-08.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alaa Mansour Zalata & Collins Ntim & Ahmed Aboud & Ernest Gyapong, 2019. "Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle," Journal of Business Ethics, Springer, vol. 160(2), pages 515-534, December.
    2. Kirsten Burkhardt & Pascal Nguyen & Evelyne Poincelot, 2020. "Agents of change: Women in top management and corporate environmental performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1591-1604, July.
    3. Young Zik Shin & Jeung-Yoon Chang & Kyeongmin Jeon & Hyunpyo Kim, 2020. "Female directors on the board and investment efficiency: evidence from Korea," Asian Business & Management, Palgrave Macmillan, vol. 19(4), pages 438-479, September.
    4. Rigolini, Alessandra & Gabaldon, Patricia & Le Bruyn Goldeng, Eskil, 2021. "CEO succession with gender change in troubled companies: The effect of a new woman CEO on firm risk and firm risk perceived," Scandinavian Journal of Management, Elsevier, vol. 37(1).
    5. Skała, Dorota & Weill, Laurent, 2018. "Does CEO gender matter for bank risk?," Economic Systems, Elsevier, vol. 42(1), pages 64-74.
    6. Ajay Palvia & Emilia Vähämaa & Sami Vähämaa, 2015. "Are Female CEOs and Chairwomen More Conservative and Risk Averse? Evidence from the Banking Industry During the Financial Crisis," Journal of Business Ethics, Springer, vol. 131(3), pages 577-594, October.
    7. Ding Ning & Irfan-Ullah & Muhammad Ansar Majeed & Aurang Zeb, 2022. "Board diversity and financial statement comparability: evidence from China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(4), pages 743-801, December.
    8. Chen, Yu & Eshleman, John Daniel & Soileau, Jared S., 2016. "Board Gender Diversity and Internal Control Weaknesses," Advances in accounting, Elsevier, vol. 33(C), pages 11-19.
    9. Réal Labelle & Rim Makni Gargouri & Claude Francoeur, 2010. "Ethics, Diversity Management, and Financial Reporting Quality," Journal of Business Ethics, Springer, vol. 93(2), pages 335-353, May.
    10. Ahmed Bouteska & Mehdi Mili, 2022. "Does corporate governance affect financial analysts’ stock recommendations, target prices accuracy and earnings forecast characteristics? An empirical investigation of US companies," Empirical Economics, Springer, vol. 63(4), pages 2125-2171, October.
    11. Eunsoo Kim, 2022. "The Effect of Female Personnel on the Voluntary Disclosure of Carbon Emissions Information," IJERPH, MDPI, vol. 19(20), pages 1-15, October.
    12. Belete J. Bobe & Ralph Kober, 2020. "Does gender matter? The association between gender and the use of management control systems and performance measures," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2063-2098, September.
    13. Shimin Chen & Xu Ni & Jamie Y. Tong, 2016. "Gender Diversity in the Boardroom and Risk Management: A Case of R&D Investment," Journal of Business Ethics, Springer, vol. 136(3), pages 599-621, July.
    14. Wafa Hili & Habib Affes, 2013. "Diversite En Genre Dans Les Conseils D'Administration Et Persistance Des Benefices Comptables : Investigation Empirique Dans Le Contexte Franҫais," Post-Print hal-00991930, HAL.
    15. Jarkko Peltomäki & Jukka Sihvonen & Steve Swidler & Sami Vähämaa, 2021. "Age, gender, and risk‐taking: Evidence from the S&P 1500 executives and market‐based measures of firm risk," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(9-10), pages 1988-2014, October.
    16. Andreas Seebeck & Julia Vetter, 2022. "Not Just a Gender Numbers Game: How Board Gender Diversity Affects Corporate Risk Disclosure," Journal of Business Ethics, Springer, vol. 177(2), pages 395-420, May.
    17. Belaounia, Samia & Tao, Ran & Zhao, Hong, 2020. "Gender equality's impact on female directors’ efficacy: A multi-country study," International Business Review, Elsevier, vol. 29(5).
    18. Alessandra Capezio & Astghik Mavisakalyan, 2016. "Women in the boardroom and fraud: Evidence from Australia," Australian Journal of Management, Australian School of Business, vol. 41(4), pages 719-734, November.
    19. Girardone, Claudia & Kokas, Sotirios & Wood, Geoffrey, 2021. "Diversity and women in finance: Challenges and future perspectives," Journal of Corporate Finance, Elsevier, vol. 71(C).
    20. Monica Violeta Achim & Viorela-Ligia Văidean & Andrada-Ioana Sabău Popa & Lavinia-Ioana Safta, 2022. "The impact of corporate governance on the digitalization process: empirical evidence for the Romanian companies," Digital Finance, Springer, vol. 4(4), pages 313-340, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:apb:jabsss:2017:p:1-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Professor Dr. Usman Raja (email available below). General contact details of provider: https://tafpublications.com/platform/published_papers/9 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.