Ownership Structure and Earnings Quality of Listed financial Firms in Nigeria

Abstract

The study determined the effect of ownership structure on earnings quality of listed financial firms in Nigeria. The study employed secondary data. The study population comprised all the 16 listed financial firms on the Nigerian Stock Exchange. Purposive sampling technique was adopted to select top 10 banks whose shares are consistently traded on the stock market. Data for ownership structure and earnings quality were sourced from the audited financial statements of the selected firms and the Nigerian Stock Exchange Factbook over a period of 10 years (2009-2018). Collected data were analyzed using pooled ordinary least square, fixed effect and random effect estimation techniques. The result from the study showed that institutional ownership (t=4.3, p˂0.05) had a positive and statistically significant relationship with earnings quality while ownership concentration (t=- 2.5, p˂0.05) had a negative and significant relationship with earnings quality. The study recommended that the institutional ownership which shows a positive relationship with earnings quality enables improved earnings of the sampled listed banks. More institutional participation should be allowed in the Nigerian listed banks as it was proved that they have the power to monitor the affairs of managers as this will have a positive impact on earnings. Concentration ownership gives mangers incentives to manage earnings to achieve short term opportunistic interest; therefore it should not be encouraged.

Ownership Concentration and Earning Quality: Moderating Role of Board Diversity

“…The higher the concentration of the company's shareholding, the lower the earning quality. The results are in line with (Oyebamiji, 2021)which proves that ownership concentration negatively affects the earning quality. (Sousa & Galdi, 2016) explained that the higher the concentration level of ownership, the less profit will be less persistent.…”

Board Diversity and Earnings Quality of Listed Deposit Money Banks in Nigeria

“…Earnings quality is defined as the ability of earnings to reveal the truth about firm profits and help anticipate future earnings by focusing on earnings stability and persistence (Akpan et al, 2024;Pratomo et al, 2022). Furthermore, earnings quality is described as a better level of earnings that allows individual users to make judgments by having access to more detailed financial information about a company (Oyebamiji, 2020). Earnings quality is also referred to in the accounting literature as the ability of the company's reported income (earnings) to further allow them to anticipate the company's earnings in the future (Cheng et al,2015).…”

The Moderating Effect of Ownership Structure on the Relationship between Related Party Transactions and Earnings Quality: Evidence from Saudi Arabia

“…Regarding the analysis of the influence of ownership structure on the association between earnings quality and RPTs, several studies (e.g., Hashim and Devi 2008;Ji et al 2015;Kim and An 2019;Abd Alhadi et al 2020;Oyebamiji 2021) indicate that earnings quality differed among companies with different ownership structures, including institutional ownership, ownership concentration, foreign ownership, managerial ownership, and state ownership. Ferdi and Rossieta (2019) explore the relationship between RPTs and institutional ownership structure, showing there is a substantial positive relationship between RPTs and institutional ownership.…”

“…Several studies (e.g., Hashim and Devi 2008;Ji et al 2015;Kim and An 2019;Abd Alhadi et al 2020;Oyebamiji 2021) investigate how earnings quality is affected by RPTs. Previous studies have generally agreed that there is a positive association between earnings quality and ownership structure.…”