The effects of corporate governance mechanisms on earnings management of listed firms in Nigeria
Vol. 13, Nr. 1/2014 , p159..174
Author(s):
Uwalomwa UWUIGBE
Daramola Sunday Peter
Anjolaoluwa Oyeniyi
Keywords:
corporate governance, earnings management, ceo duality, board size, discretionary accruals
Abstract:
This study basicallyexamined the effects of corporate governance mechanism on earnings managementin Nigeria.To achieve the objectives of this study, a total of 40 listed firms in theNigerian stock exchange market were selected and analyzed for this study usingthe judgmental sampling technique. The choice of the selected firms arisesbased on the nature and extent of corporate financial failures and scandalsthat has been withnessed in the industry overtime. Also, the corporate annualreports for the period 2007-2011 were used for the study. The regressionanalysis method was employed as a statistical technique for analysing the datacollected from the annual report of the selected firms. Findings from the studyrevealed that while board size and board independence have a significant negative impact on earningsmanagement (proxied by discretionary accruals); On the other hand, CEO dualityhad a significant positive impact on earnings management for the sampled firmsin Nigeria.Hence the paper concludes that firms with larger boards and diverse knowledgeare more likely to be more effective in constraining earnings management thansmaller boards since they are likely to have more independent directors withmore corporate or financial expertise.
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http://online-cig.ase.ro/jcig/art/13_1_7.pdf
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