Corporate governance and earnings management in listed Nigerian manufacturing companies

Earnings Management has become an international phenomenon with the harmful impacts on firms and has created an increased concern among academics and scholars. Aggressive earnings management practices have led to the occurrence of a number of corporate scandals like Enron and WorldCom. The effect of corporate governance on earnings management of listed manufacturing firms in Nigeria was studied. The ex post facto research design was applied. The population is the forty-nine (49) listed manufacturing companies in Nigeria as at 31st December 2019 on Nigeria Stock Exchange (NSE). A sample size twenty-six (26) firms were selected using the stratified random sampling technique and the period under review is 2010-2019 (10 years). Data used in the research were obtained from annual reports of the sampled companies. Data was analyzed using both Descriptive and Inferential statistics. The study revealed that corporate governance has no significant effect on earnings management of listed manufacturing companies in Nigeria (Adj.R2= -0.005781, F(4)= 0.627844, p>0.05); there is no significant effect of board meeting frequency on earnings management (β = 0.010544; R2= 0.005122, t(1)= 1.153890, p>0.05); board gender diversity has no significant effect on earnings management (β = 0.000765; R2= 0.002453, t(1)= 0.795011, p>0.05); and board size has no significant effect on earnings management of listed companies in Nigeria (β = 0.001132; R2= 0.000395, t(1)= 0.319628, p>0.05). The study concluded based on statistical results that corporate governance does not significantly affect earnings management of listed firms in Nigeria. It is however recommended that companies should adhere strictly to corporate governance code in order to increase positive perception among investors and other users that a company's earnings and overall financial is reliable