Impact of Board Characteristics on Earnings Management Practices of Listed Consumer Goods Firms in Nigeria
Abstract
This study examined the impact of board characteristics on earnings management of Nigerian listed consumer goods firms for the period 2014–2023. Two research objectives and research questions guided the study. The board characteristics variables used in the study were board size, board composition. The study population comprised twenty-one consumer goods firms listed on the Nigerian Exchange Group, out of which fourteen were selected through purposive sampling. A correlational research design was employed, and multiple regression analysis was conducted using the Ordinary Least Squares (OLS) method. Earnings management was measured using discretionary accruals based on the Modified Jones (1995) model. The findings of the study revealed, among others, that board size has a positive and significant effect on earnings management of listed consumer goods firms in Nigeria, indicating that larger Zboards may face coordination challenges that facilitate earnings manipulation. The study also found that board composition, measured by the proportion of independent directors, has a positive and significant effect on earnings management, suggesting that a higher proportion of independent directors helps in curbing earnings manipulation. Based on these findings, it was recommended, among others, that consumer goods firms in Nigeria should maintain an optimal board size of between 8 and 12 members to ensure effective decision-making and monitoring. In addition, firms should increase the proportion of independent directors on their boards as a strategy to strengthen oversight and reduce earnings manipulation.
Keywords
Board Size, Board Composition, Earnings Management, Discretionary Accruals
Citations
IRE Journals:
Jude Duna , Ado Ahmed , Lawan Yahaya
"Impact of Board Characteristics on Earnings Management Practices of Listed Consumer Goods Firms in Nigeria" Iconic Research And Engineering Journals Volume 9 Issue 3 2025 Page 1750-1760
IEEE:
Jude Duna , Ado Ahmed , Lawan Yahaya
"Impact of Board Characteristics on Earnings Management Practices of Listed Consumer Goods Firms in Nigeria" Iconic Research And Engineering Journals, 9(3)
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