| Summary: | The issue of earnings manipulations of the financial report is attracting the attention of
researchers, practitioners and relevant authorities in the best interest of the global users.
igerian corporations are involved in financial scandals; specifically, the contemporary
revealing by the Nigerian Security and xchange Commission (SEC) provided
thoughtful questions related to the effectiveness and reliability of the reported
accounting earnings. SEC which is the highest regulator of the Nigerian Stock Exchange
(NSE), delisted 35 companies in recent five years due to accounting scandals. The main
objective of the tudy is to examine the direct and indirect relationship between Corporate
Governance attribute and audit quality on Earning Management. The population of the study
comprises all the 169 firms listed from 2012 until 2017. A total of 63 companies ware
used as a sample after the filtration and screening criteria employed by the study. The
data used is from secondary sources using data stream, annual reports and accounts of
the companies. Thus, a balanced panel data of 378 finn-year observations were tested
using multiple regression analysis to satisfy the mediation conditions proposed by
Baron and Kenny. The analysis was carried out based on four phases of the conditions;
as such, each phase represented a single objective of the study. The finding of objective
one reveals that board size, (BODSIZE), board independent (BODINDEP) and audit
committee gender (ACWGEND) are positively significant with accrual Earnings
Management (AEM). Contrary to that, board gender (BODGEND) and audit committee
accounting expertise (ACAEXPT) is negatively significant with AEM. Thus, audit
committee size (ACSIZE), and audit committee meetings (ACMEET) are negatively
insignificant with AEM. In the second objective of the analysis, the result highlighted a
significant positive relationship between BODSIZE, ACSIZE and ACMEET with l it
Quality (AQ) using Audit Fees (AUFEES) as a proxy. While the result of BODGEND
and ACAEXPT ar po itively insignificant with AQ. In contradiction to that, a
significant negative relationship was documented between BODINDEP and
ACWGEND with AQ. The analysis of objective three established a significant positive
relationship among AUFES and AEM, which means that higher audit fee is associated
with high AEM. Moreover, the meditational model for objective four reveals that
AUFEES partially mediate only the relationships amongst the BODSIZE, BODINDEP,
ACWGEND and AEM. This finding will help the investors to make a rational decision
on their investment, it will also contribute academically to the existing literature, and it
will help the relevant authorities to improve on the current practices of corporate
governance. It is recommended that the relevant authority should, in the review of
subsequent Codes, recognise the presence of legal expertise in the board of directors
and audit committee, as they are found to be monitors in constraining the artificial
implementation of good govemance. Also, emphasis should be placed on gender
diversity and their experience in the board and audit committee, rather than relying on
their status.
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