Real earnings management in Nigeria - The role of Board competence and Institutional ownership of industrial goods sector

Résumé

Due to a number of accounting scandals and financial anomalies, users of accounting information are growing more concerned about the quality and dependability of the data in the financial statements of well-known corporations worldwide. This is evident from the multiple corporate accounting scandals that were publicized in the US, Europe, and Nigeria in particular. This study evaluates the effect of board competence, institutional ownership on earning management of listed industrial goods firms in Nigeria. The 13 listed industrial goods businesses that were a part of the Nigerian Exchange Group (NGX) as of December 31, 2022, make up the study’s population, and all the thirteen firms was examined in the research. Panel regression was utilized to analyze the obtained data. The findings indicate that board competence has impact on the earnings management of Nigerian industrial goods enterprises. At the 5% significance level, these are represented as coefficients (3.59) with P-values (0.001). However, the P-value (0.361) and coefficient (15.94) show that institutional ownership offers no discernible impact on earnings management. The research came to the conclusion that actual earnings management was impacted by board competency. However, there is little proof that real earnings management was impacted by institutional ownership. The study's conclusion was that Nigerian industrial products businesses ought to have additional independent directors with financial experience on their boards.