The effects of corporate governance mechanisms on earnings management of listed firms in Nigeria
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Abstract
Description
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.
Keywords
H Social Sciences (General), HF5601 Accounting