Earnings Management and Board Structure: Evidence from Nigeria

The board structure of an organization gives an overview of the standard of such organization, which also influences its public image. This study attempts to evaluate the role board structure plays in curtailing earnings management practices in Nigerian companies. This study sampled the data of 137 quoted companies in Nigeria for a period of 8 years (2003-2010). Earnings management was measured using the magnitude of the discretionary accruals as estimated by the performance matched modified Jones model. The ordinary least squares (OLS) regression technique was used to measure the research model as well as the Pearson moment correlation coefficient. The study shows that there is a significant relationship between board structure and earnings management practices in Nigeria. The study shows that there is a negative significant relationship between board size, gender, and board composition with earnings management; also, there is a positive significant relationship between board meeting and earnings management practices in Nigeria. There is a positive nonsignificant relationship between the presence of a remuneration committee and the dualization of CEO and chairman positions with earnings management practices in Nigeria. This study recommends that regulators at all levels should enforce the preparation and publication of financial reports by companies operating in Nigeria. Keywords: earnings management, board composition, board size, gender equality, board meeting