CORPORATE GOVERNANCE AND REAL EARNINGS MANAGEMENT IN NIGERIAN LISTED FINANCIAL FIRMS

Chinwuba A. Okafor (), Killian O. Ogiedu (), Edosa J. Aronmwan () and Efafosa Ogboro ()
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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

Oradea Journal of Business and Economics, 2024, vol. 9, issue 2, 119-131

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.

Keywords: Corporate Governance; Earnings Management; Real Earnings Management; Board Tenure; Board Expertise; Chief Executive Officer Ownership. (search for similar items in EconPapers)
JEL-codes: M4 M41 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ora:jrojbe:v:9:y:2024:i:2:p:119-131

DOI: 10.47535/1991ojbe201

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