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Board Dynamics and Financial Reporting Quality in Nigeria

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  • Victor Chiedu OBA

    () (Nasarawa, State University, Nigeria)

Abstract

The code of corporate Governance code (2011) in Nigeria was ushered with a target to enhance the monitoring function of board of directors and audit committees. This study investigates the ability of certain board dynamics to influence management attitude in relation to reporting quality in Nigerian listed firms. Accruals, a proxy for financial reporting quality is estimated using the Dechow and Dichev model. Using a panel data obtained from annual reports of 69 listed Nigerian firms from 2008 to 2012, the study documents that board independence, board tenure, gender diversity and directors’ shareholding are significant predictors of financial reporting credibility in Nigeria. The board size was found to have a neutral effect on financial reporting quality. This study extends existing literature by contributing to knowledge on how board traits influence financial reporting quality in emerging economies such as Nigeria.

Suggested Citation

  • Victor Chiedu OBA, 2014. "Board Dynamics and Financial Reporting Quality in Nigeria," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(2), pages 226-236, May.
  • Handle: RePEc:rom:rmcimn:v:15:y:2014:i:2:p:226-236
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    File URL: http://rmci.ase.ro/no15vol2/07.pdf
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    References listed on IDEAS

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    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    2. Short, Helen & Keasey, Kevin, 1999. "Managerial ownership and the performance of firms: Evidence from the UK," Journal of Corporate Finance, Elsevier, vol. 5(1), pages 79-101, March.
    3. Klein, April, 2002. "Audit committee, board of director characteristics, and earnings management," Journal of Accounting and Economics, Elsevier, vol. 33(3), pages 375-400, August.
    4. Xie, Biao & Davidson, Wallace III & DaDalt, Peter J., 2003. "Earnings management and corporate governance: the role of the board and the audit committee," Journal of Corporate Finance, Elsevier, vol. 9(3), pages 295-316, June.
    5. Ryan Davidson & Jenny Goodwin-Stewart & Pamela Kent, 2005. "Internal governance structures and earnings management," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 45(2), pages 241-267.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Financial Reporting Quality; Board of Directors; Earnings Management; Corporate Governance.;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • G3 - Financial Economics - - Corporate Finance and Governance

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