CORPORATE GOVERNANCE AND EARNINGS MANAGEMENT IN DISTRESS FIRMS IN NIGERIA

ABSTRACT

As economic uncertainties and financial distress continue to challenge companies in emerging markets in Nigeria, understanding the role of corporate governance in mitigating earnings manipulation becomes crucial. This study seeks to evaluate and investigates the relationship between corporate governance mechanisms and earnings management practices in distress firms in Nigerian quoted companies. This research employs a cross-sectional design approach due to the time series data attributes. The Ordinary Least Square method of data analysis was used to find out whether there is a relationship between the corporate governance variable and earnings management. In examining the level of corporate governance disclosures of sampled companies, a disclosure index was guided by the Nigerian Code of Corporate Governance, the study therefore observed that a positive but significant relationship exists between Audit Committee and Board Size, a positive but insignificant relationship exist between Board Size and Directors Renumeration, and a negative but insignificant relationship exists between the Institutional Ownership. The study therefore concludes that the thrust of corporate governance lies in putting in place the structures that would ensure that management is accountable to shareholders. This study suggests the efforts to strengthen the capacity of the regulatory bodies and review adequacy of legal enforcement provisions.