Impact of Nomination and Governance Committee Attributes on Earnings Management of Listed Firms on the Nigerian Exchange Group

Peter-Mario Efesiri EFENYUMI^*1, John Ugochukwu NWOYE² and Emmanuel Ikechukwu OKOYE³

¹PhD Student, Department of Accountancy, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria

²Lecturer, Department of Accountancy, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria

³Professor of Accounting, Department of Accountancy, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria

Article History

Received: 10.09.2022

Accepted: 30.09.2022

Published: 10.10.2022

Abstract: All-encompassing corporate governance structure in firms especially the existence of diligent and independent nominating/governance committee is key to the overall wellbeing of organisations. This study uses 76 sample firms and a holistic earnings management model to assess the effects of the nomination/governance committee's qualities (diligence and independence) on the management of earnings for listed non-financial enterprises on the Nigerian Exchange Group from 2012 to 2021. Using Stata 13.0 software for both descriptive statistics and simple regression methods, two study hypotheses were created and tested (OLS). The findings showed that measures of nomination/governance committee diligence exert positive significant influence on earnings management of listed firms on Nigerian Exchange Group while nomination/governance committee independence exerts negative significant influence on earnings management of listed firms on Nigerian Exchange Group. Also, the introduced control variables (sales growth and market capitalisation) have a negative relationship and significant effect earnings management of Some Selected Listed Corporations in Nigeria. Subsequently it was recommended upon this study that management of companies should not emphasis too much on the role of nomination/governance committee especially in the areas of diligence (frequency of meetings) but on the independence of nomination/governance committee in relation to earnings management and regulatory bodies should shift emphasis on how financial estimates prepared can be devoid of earnings management.

Keywords: Corporate governance, nomination/governance committee, diligence, independence, holistic model, earnings management, Nigeria.