ABSTRACT
The broad objective of this study is to examine the relationship between chief executive officer succession and contents of accounting information in Nigeria. To achieve this broad objective, the following variables like chief executive officer turnover, chief executive officer origin, and appointment of heir-apparent and chief executive officer were examined as factors explaining the contents of accounting information variables employed in this study.
This study adopted cross-sectional research design, while the research data were generated from different annual reports of sixty eight (68) quoted firms on the Nigerian Stock Exchange from various sectors of the economy. The study covered a period of fourteen years (2007-2020). Panel regression models, probit regression model and three stage least square regression model were specified and descriptive statistics, correlation analysis, and regression analyses, were carried out with the aid of Eviews 8.0.
The results indicate that there is insignificant positive relationship between peaceful CEO turnover and earnings management; insignificant negative relationship between appointment of CEO from within the company and earnings management; and insignificant negative relationship between appointing a non-heir-apparent as successor CEO and earnings management. It also shows significant positive relationship between peaceful CEO turnover and firm performance; insignificant positive relationship between appointment of CEO from within the company and firm performance; and insignificant negative relationship between appointing a non-heir-apparent as successor CEO and firm performance. The estimation also shows that there is insignificant positive relationship between peaceful CEO turnover and likelihood of firms to engage in financial statements fraud; insignificant positive relationship between appointment of CEO from within the company and firm’s likelihood to engage in financial statements fraud; and insignificant positive relationship between appointing a non-heir-apparent as successor CEO and firm’s likelihood to engage in financial statements fraud. It also shows that there is a long-run significant and positive interrelationship between all the variables employed in this study. The study recommends that regulators of corporate bodies in Nigeria such as the Corporate Affairs Commission, Financial Reporting Council of Nigeria (FRCN), Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Nigerian Stock Exchange (NSE) and the Companies and Allied Matters Act 2020 should put policies in place to ensure that organisations exercise best practices in the process of carrying out chief executive officer succession, and that the appointment of chief executive officer succession should be influenced by the understandability of his role as the chief accounting officer of an organisation.
