BOARD STRUCTURE AND REAL EARNINGS MANAGEMENT OF LISTED FIRMS IN NIGERIA

Abstract

Appropriately structured and composed boards can stimulate real earnings management, particularly when such boards possess desirable attributes. This study empirically examines the nexus between board structure and real earnings management of listed firms in Nigeria using forty (40) quoted manufacturing firms in Nigeria over the period, 2012 to 2017. The data were sourced from the annual reports of the listed firms. The choice of the data was dictated by data availability. Employing descriptive statistics, correlation matrix and OLS and multivariate panel data estimation technique, after conducting the Hausmann, test of correlated random samples, wherein the fixed effect model was selected as the appropriate model, the empirical results revealed that board independence, board size, board gender are significant corporate governance variables that influence the real earnings management of listed firms in Nigeria, given their respective t-ratios of 2.106, 2.072 and 2.174 (in absolute values).The study finds evidence that firm size has a significant impact on real earnings management of listed firms in Nigeria. The study recommends the institutionalization of sound corporate governance mechanisms, particularly with respect to the structure, composition and size of board of firms in Nigeria.