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Corporate Governance And Real Earnings Management In Nigerian Listed Financial Firms

Author

Listed:
  • Chinwuba A. Okafor

    (Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria)

  • Killian O. Ogiedu

    (Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria)

  • Edosa J. Aronmwan

    (Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria)

  • Efafosa Ogboro

    (Department of Accounting, Faculty of Management Sciences, University of Benin, Benin City, Nigeria)

Abstract

The focus of the study is the examination of the relationship that exists between corporate governance and real earnings management in Nigerian listed financial firms, with attention on three corporate governance variables (board tenure, board expertise and CEO ownership). The study adopts a longitudinal research design. Descriptive statistics, correlation analysis and panel regression analysis technique, with emphasis on the random effect model, were used for data analysis. A purposive sample of thirty seven (37) firms, out of the Forty nine (49) financial firms listed on the Nigerian Exchange Group, at year end 31st December, 2022 was studied for a period of seven years, 2016 to 2022. Findings from data analysis revealed that board expertise and CEO ownership have insignificant but positive relationships with real earnings management. In addition, board tenure was found to be significantly but negatively related to real earnings management. The correlation analysis revealed that there is a negative correlation between the variables board expertise, CEO ownership and real earnings management. Also, board tenure has a positive correlation with REM. The study recommends that directors of companies should be encouraged to spend longer time on the board as this will serve as incentive to avoid unfavourable earnings management.

Suggested Citation

  • Chinwuba A. Okafor & Killian O. Ogiedu & Edosa J. Aronmwan & Efafosa Ogboro, 2024. "Corporate Governance And Real Earnings Management In Nigerian Listed Financial Firms," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 9(2), pages 119-131, September.
    • Handle: RePEc:ora:jrojbe:v:9:y:2024:i:2:p:119-131
    DOI: http://doi.org/10.47535/1991ojbe201
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    References listed on IDEAS

    as
    1. Dhouha Bouaziz & Bassem Salhi & Anis Jarboui, 2020. "CEO characteristics and earnings management: empirical evidence from France," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 18(1), pages 77-110, January.
    2. 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.
    3. Abubakar, Ibrahim Adamu & Rokiah Binti Ishak & Sitraselvi A/P Chandren, 2017. "The Effect of Board Attributes on Real Earnings Management in Nigerian Financial Institutions," International Journal of Emerging Trends in Social Sciences, Scientific Publishing Institute, vol. 1(1), pages 76-83.
    4. Peter Nderitu Githaiga & Paul Muturi Kabete & Tirisa Caroline Bonareri, 2022. "Board characteristics and earnings management. Does firm size matter?," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2088573-208, December.
    5. Sattar Khan & Yasir Kamal & Muhammad Abbas & Shahid Hussain, 2022. "Board of directors and earnings manipulation: evidence from regulatory change," Future Business Journal, Springer, vol. 8(1), pages 1-22, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Corporate Governance; Earnings Management; Real Earnings Management; Board Tenure; Board Expertise; Chief Executive Officer Ownership.;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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