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Assessment Of Earnings Management And Corporate Governance Practices In Nigeria
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1.6 Significance of the Study
1.
The research work is relevant to investors in carrying out investment
decisions in relation to organizations as the variables affecting
earnings management can be used to detect the presence of opportunistic
earnings management in an organization and also whether to invest in
such organization or not.
2. The work will enlighten financial
analyst about the likelihood of the occurrence of earnings management in
organizations. It will also serve as a guide to financial analyst in
making recommendations to its client about investment decisions with
respect to the reported earnings of firms.
3. It will assist
managers in knowing the consequent effect of the practice of earnings
management on the goodwill of the organization and the investing public.
4.
It will assist policy makers in formulating policies that will enable
organizations adopt a more rigid corporate governance hence, reducing
the practice of earnings management.
5. Subsequent researchers
and academicians will find the research work useful by using it as a
guide and reference point in carrying out further studies.
1.7 Scope of the Study
This
study basically seeks to investigate the relationship between earnings
management and corporate governance among quoted companies on Nigerian
Stock Exchange. Hence, the population of the study is the total 210
companies listed on Nigerian Stock Exchange while the sample consist of
twenty selected companies listed on Nigerian Stock Exchange between 2006
and 2015.
1.8 Limitations to the Study
The population is not
adequately represented as a result of the smallness of the sample size
and the sample period covered. Also, the limited number of variables
used for the research work poses a limitation to the study as a larger
number would help elucidate the significance of corporate governance in
curbing earnings management. Finally, inability to use a wider
geographical scope as the study is limited to companies operating in
Nigeria.
1.9 Definition of Terms
Earning Quality: Earning
quality simply mean the degree to which management’s choices of
accounting estimate can affect imported income (thus choice occurs every
period) some of such estimate may be difficult quantify given the
company the lee way (opportunity) to report a wide range of periodic
earnings.
Corporate Governance: Corporate governance is a combination
of laws, regulations, listing rules and voluntary private sector
practices that enable the corporation to attract capital, perform
effectively, generate profit and meet both legal obligation and general
societal expectation. It is all the corporation relationship among
capital, product, services and even society at large.
Performance
Management: This is a process for establishing a shared workforce
understanding about what is to be achieved in an organization level. It
is about aligning the organization objectives with the employees agreed
measures, skills, competency requirements, development plans and the
delivery of results. The emphasis is on improvement in order to achieve
the overall business strategy and create a high performance workforce.
Management:
Is a distinct process consisting of planning, organizing, starring,
directing, coordinating, reporting and budgeting, performed to determine
and accomplished stated objectives with the effective use of human and
other resources.
Firm: A business concern, especially one involving a
partnership of two or more people. It’s a business organization, such
as a corporation, Limited Liability Company. Firms are typically
associated with business organizations that practice law, but the term
can be used for a wide variety or business operation units.
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ABSRACT - [ Total Page(s): 1 ]Earnings management has received considerable attention in recent times. This is due to its linkage with the reliability of published accounting reports. Indication from the academic literature has shown that the practice of earnings management is quite extensive among publicly traded firms. In response to the demand for greater proportion of independent directors on corporate boards and the need for financial sophistication of audit quality, this study examines the role of independent board of ... Continue reading---
