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Board Characteristics And The Likelihood Of Financial Statement Fraud

Author

Listed:
  • Muhammed Lawal Subair
  • Ramat Titlayo Salman
  • Ayodeji Fatai Abolarin
  • Abdulrasheed Taiwo Abdullahi
  • Akeem Sisofa Othman

    (Kwara State Polytechnic, Nigeria
    University of Ilorin, Nigeria
    Kwara State Polytechnic, Nigeria
    Kwara State Polytechnic, Nigeria)

Abstract

The study examines the effect of board characteristics on financial statement fraud likelihood of quoted manufacturing firms in Nigeria. The scope of the study covers board attributes such as board independence, board expertise and board diligence; and the beneish M-score was used as the measure of fraud likelihood. This study utilized a quantitative research design. The sample covered 39 manufacturing companies in the Nigerian Stock Exchange (NSE) as at 2019. Secondary data was utilized for this study and the data were extracted from the annual reports of corporate organizations for the period 2013-2019 financial years. The binary logit regression was employed as the method of data analysis in the study. The findings reveal that the odd ratio of board independence, board expertise and board diligence negatively and significantly reduce the log odds of financial statement fraud in manufacturing firms in Nigeria. The study concludes that there is a need for boards to be more effective in their monitoring roles to reduce the occurrence of fraud.

Suggested Citation

  • Muhammed Lawal Subair & Ramat Titlayo Salman & Ayodeji Fatai Abolarin & Abdulrasheed Taiwo Abdullahi & Akeem Sisofa Othman, 2020. "Board Characteristics And The Likelihood Of Financial Statement Fraud," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 9(1), pages 57-76.
    • Handle: RePEc:cpn:umkcjf:v:9:y:2020:i:1:p:57-76
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    References listed on IDEAS

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    Cited by:

    1. Zhang, Zejun & Wang, Zhao & Cai, Lixin, 2025. "Predicting financial fraud in Chinese listed companies: An enterprise portrait and machine learning approach," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    2. Farah Pradini Ilda Saputri & Nurul Azlin Azmi & Norbalkish Zakaria, 2025. "Corporate Governance Effectiveness as a Deterrent to Financial Statement Fraud: Indonesian Evidence," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(9), pages 6928-6942, September.
    3. Yu, Wei & Yan, Yueyun & Zhu, Keying & Zhang, Peijue, 2024. "Can value-added tax refund policy inhibit corporate financial fraud? Evidence from China," Emerging Markets Review, Elsevier, vol. 63(C).

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