Earnings Management and Corporate Governance in Africa: A PRISMA-Based Systematic Review

Aymane Chemmaa (), Mohammed Ibrahimi and Mohammed Amine
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Aymane Chemmaa: Hassan II University of Casablanca, ENCG Casablanca
Mohammed Ibrahimi: Hassan II University of Casablanca, ENCG Casablanca
Mohammed Amine: Hassan II University of Casablanca, ENCG Casablanca

A chapter in Proceedings of the International Conference on Multidisciplinary Research in Management and Economics (ICMRME 2025), 2025, pp 212-224 from Springer

Abstract: Abstract Although corporate governance has been widely studied, its role in shaping earnings management in the African context remains insufficiently explored. This paper addresses this gap by systematically reviewing the literature using the PRISMA methodology to analyze how governance mechanisms influence financial reporting practices across the continent. The findings reveal strong regional disparities. In North Africa, the interaction between ownership structures, CEO duality, and institutional reforms significantly affects earnings management. Family ownership and CEO-Chairman duality tend to increase manipulations, while institutional ownership and post-reform audit structures reduce them. West African evidence highlights the importance of board financial expertise and risk management committees, though political connections and concentrated ownership frequently undermine these safeguards. Research from East Africa underscores the potential of gender diversity and institutional ownership to curb manipulations, especially when combined, yet also notes that their effects can be paradoxical when associated with board independence. South Africa stands out for its robust regulatory environment and audit quality, though managerial behavior and ethical leadership ultimately shape governance effectiveness. In Central Africa and other regions, auditor specialization, board stability, and gender-balanced committees emerge as crucial tools for limiting accounting manipulation, particularly in high-risk sectors. This review highlights the importance of tailoring governance reforms to local institutional contexts and calls for future research to focus on SMEs, sensitive industries, and the impact of emerging technologies on financial transparency in Africa.

Keywords: Africa; Corporate Governance; Earnings Management; PRISMA; Systematic Literature Review (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-892-9_13

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DOI: 10.2991/978-94-6463-892-9_13

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