EARNINGS MANAGEMENT AND CORPORATE GOVERNANCE IN NIGERIA BANKING INDUSTRY
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EARNINGS MANAGEMENT AND CORPORATE GOVERNANCE IN NIGERIA BANKING INDUSTRY
EARNINGS MANAGEMENT AND CORPORATE GOVERNANCE IN THE NIGERIAN BANKING INDUSTRY
This article investigates the connection between various corporate governance approaches and earnings management.
It investigates two types of governance mechanisms: internal (ownership concentration and board structure) and external (take-over pressure and institutional ownership).
When other factors are taken into account, I find that firms with stronger internal governance, such as higher ownership concentration and smaller boards, manage earnings more, whereas firms with stronger external governance, such as higher institutional holdings and high takeover pressure, manage earnings less.
The research suggests that the struggle between ownership and control, rather than the conflict between insiders and outsiders, drives earnings management. June, Frank Yu’s (2006).
To examine the relationship for the year 2006, a group of publicly traded corporations was analysed. Quality has been quantified by the assignment of weights to a collection of linked factors, whereas earnings management has been quantified through discretionary accruals.
The discretionary accruals were calculated using a modified cross-sectional Jones model. The presence of a positive association between corporate governance and earnings management is indicated via Ordinary Least Square estimation.
The unusual results may be related to the transition phase that Pakistani corporations are going through following the adoption of the Code of Corporate Governance in 2002, which has produced a trend to boost discretionary accruals as a risk-averse tactic. 2009, Euro Journals Publishing Inc.
The goal of this study is to investigate the impact of corporate governance on earnings management in fifteen Nigerian commercial banks. Zenith International Bank Plc, Afribank Plc, Union Bank Plc, Skye Bank Plc,
Intercontinental Bank Plc, United Bank for Africa Plc, Wema Bank Plc, Equitorial Trust Bank Plc, Platinum Habib Bank Plc, Fidelity Bank Plc, First Bank Plc, Unity Bank Plc, and Spring Bank Plc are the commercial banks.
According to the findings of the study:
1. Corporate governance has an impact on earnings management in the majority of Nigerian commercial banks.
2. It was not true that corporate governance has no impact on earnings management in Nigerian commercial banks.
3. There is a link between various corporate governance mechanisms and the earnings management of Nigerian commercial banks. Source: Questionnaire response.
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