How Corporate Governance Practices Shape Firm Transparency: A Deep Dive into Earnings Management in Nigeria

Christiana Idowu Omotade¹ , Etim Essien² , Faith Obueni³ , Ukpabio Susan Ita⁴

1. Dept. of Accountancy, Faculty of Management Sciences, University of Cross River, Nigeria.
2. Dept. of Accountancy, Faculty of Management Sciences, University of Cross River, Nigeria.
3. Dept. of Political Sciences, Faculty of Social Sciences, Chukwuemeka Odimegwu Ojukwu University, Nigeria.
4. Dept. of Linguistics and Communication, Faculty of Arts, University of Calabar, Nigeria.

Section:Research Paper, Product Type: Journal-Paper
Vol.9 , Issue.12 , pp.44-51, Dec-2023

Online published on Dec 31, 2023

Copyright © Christiana Idowu Omotade, Etim Essien, Faith Obueni, Ukpabio Susan Ita . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
The paper examined the effect of corporate governance mechanisms on earnings management of 24 non-financial quoted companies in the Nigerian Stock Exchange from 2014-2018. The study primarily focused on the impact of board size, board independence, audit committee independence and gender diversity on earnings management. The Longitudinal Ex-post facto research design was used for the study, allowing for the of expected effects between the independent and dependent variables. While earnings management was represented by discretionary accruals, descriptive and correlation analyses were performed on data collected using EViews 11. The hypothesis of the study was tested using Regression models. Due to the problems of serial correlation, heteroscedasticity and cross-sectional reliance in the panel data, the regression was modelled and reported using the Panel Generalized Least Square (PGLS). The findings revealed that board size has a negative but insignificant impact on discretionary accruals, while board independence, audit committee independence and gender diversity have a negative and significant effect on discretionary accruals. The study therefore recommends that regulatory authorities should encourage larger independent directors ‘appointment in corporate boards of listed firms. The study also recommends a greater proportion of independent directors on corporate firms’ audit committee, and that Companies should appoint more female directors into boards.

Key-Words / Index Term :
Corporate Governance, Earnings, Earnings Management, Gender Diversity, Audit, Firms

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