1 Corporate Governance And firm’s Earnings Quality

Corporate Governance stems from theories which have undoubtedly assisted to understand the role that it may play in contributing to the quality of an organization earnings.A theoretical review of corporate governance theories found that various applications of Corporate Governance principles and mechanisms enhanced achievement of the major objective of corporate governance which is to maximize firm’s value for stakeholders. The study found that sound governance practices helps in reducing conflicts of interest between business owners and management,which is the key focus of corporate governance theories. It concluded that effective Corporate Governance requires applying a combination of Corporate Governance theories rather than applying an individual theory to maximise firm’s value