Corporate Governance and the Earnings Quality of Nigerian Firms

Abstract

The focus of the study is to examine the impact of corporate governance on earnings quality in listed firms in Nigeria. The specific objective is to investigate the effect of board size, board independence and board gender diversity on earnings quality. This study was carried out with secondary data retrieved from corporate annual reports of the sampled companies and the data was analysed using panel regression on a sample of 37 quoted manufacturing companies for the period 2011-2017. On the overall, the result reveals that Board size, board independence and board gender diversity used for measuring corporate governance show significant impact on earnings quality. In addition, corporate governance variables appear to be quite sensitive to the measure of earnings quality used. Based on the findings, the study recommends the need for comprehensive evaluation of corporate governance systems of companies. The study recommends the need for more level of board independence. The diversity issue though is gaining momentum in corporate governance literature can still be regarded as not as dominant as compared to others especially as it relates to protecting shareholder rights and framing dividend policy. The significance of the variable nevertheless suggests that companies should thrive to achieve an appropriate diversity mix.

Company Characteristics and Earnings Quality of Listed Non-Financial Companies in Nigeria

“…The relationship was positive for the service sector but negative for natural. The positive relationship aligns with the result of Olaoye & Adewumi (2020) and Attar & Suwaidan (2012) that board size has a positive and significant impact on earnings quality. Whereas, Fodio, Ibikunle and Oba (2013) discovered that board size is negatively related to earnings quality using a sample of insurance companies in Nigeria.…”

Pengaruh Karakteristik Dewan Komisaris, Karakteristik Komite Audit, dan Kualitas Audit Terhadap Kualitas Laba

“…Pengaruh Keberadaan Anggota Dewan Komisaris Wanita terhadap Kualitas Laba Nilai t-hitung variabel ADKW 0,477 dengan signifikansi 0,634 (>0,05) mengartikan keberadaan anggota Dewan Komisaris wanita tidak memiliki pengaruh pada kualitas laba. Hipotesis kedua ditolak dan penelitian ini tidak mendukung temuan Olaoye & Adewuni (2020) Temuan yang berbeda dengan dengan penelitian sebelumnya dimungkinkan adanya perbedaan penggunaan populasi dan sampel penelitian. Perusahaan di wilayah yang berbeda memiliki karakteristik budaya nasional yang berbeda pula di mana hal ini berpengaruh pada karakter individu manajemen yang mengarah pada perbedaan pengambilan keputusan (Khabibah & Suryatimur, 2019).…”

“…Wanita dianggap mampu meminimalisisr agency problem karena peranannya yang lebih aktif dalam pengawasan (Adams & Ferreira, 2009). Penelitian Olaoye & Adewuni (2020) memberikan hasil yang sifgnifikan terkait pengaruh keberagaman gender pada kualitas laba. Akan tetapi, temuan ini bertolak belakang dengan temuan Irwansyah, Vijaya & Tripalupi (2020) Artikel ini diorganisasi sebagai berikut.…”

Board gender diversity and firm performance: new evidence from cultural diversity in the boardroom

“…In general, it is assumed that gender diversity increases firm performance (Salloum, Azzi, Mercier-Suissa, & Khalil, 2016). Moreover, gender diversity leads to a better corporate image by higher firm performance (Olaoye & Adewumi, 2020). The selection process of board members that includes both genders is expected to lead to better management as well (Galia, Lentz, Max, Sutan, & Zenou, 2017).…”