European Journal of Business and Innovation Research (EJBIR)

EA Journals

Earnings Management

Board Monitoring Mechanisms and Earnings Management of Listed Non-Finance Firms in Nigeria (Published)

Management opportunistic behavior has led to manipulations of earnings and thus loss of investments by misguided investors. The board of directors through their supervisory roles tend to monitor and control some of these unbecoming acts of managements. This study therefore examined the effect of board monitoring mechanisms on earnings managements of non-finance firms listed on the floor of the Nigeria Exchange Group from 2012-2021. The independent variable of the study being board monitoring mechanism was proxied by board size (BODS), board independence (BODI) and board gender diversity (BGDV) while the dependent variable being earnings management was proxied by Modified Jones Model (MJON). Furthermore, in line with related extant literature, the study controlled the model goodness of fit by employing the variable of cash flow return from operations (CFOA) The research design adopted for this study was ex post facto, purposive sampling technique was employed and secondary source of data used was obtained from the studied companies’ annual report and Nigeria Exchange Group fact book. Least square variable regression was adopted to analyze and test the three hypotheses formulated for the study. The study revealed that board size, board independence, board gender diversity has significant negative effect on earnings management of non-finance firms listed on the floor of the Nigeria Exchange Group. It was thus concluded that board monitoring mechanisms have significant effect on earnings management of listed non-finance firms in Nigeria. Based on these findings, it was recommended that board size should not be less than ten members, non-executive directors should constitute 80% of total board members and female members should constitute half of the board size as this composition tends to reduce earnings management of the sampled firms.

Keywords: Board independence, Board monitoring mechanism, Board size, Earnings Management

Accounting for Intellectual Capital and Financial Reporting Quality of Listed Manufacturing Firms in Nigeria (Published)

This study investigated the extent to which intellectual coefficient (IC) in human resource (HR) accounting relates with the quality of financial reports. IC was assessed with litigation risk.The research design employed in this study is the ex-post facto research design. Purposive sampling technique was adopted to sample 14 firms with up to date and complete annual reports and accounts for the study period (2017-2021). Secondary data derived from the financial statements of companies were reviewed for the study. Descriptive statistics was used to summarize the mean, median, standard deviation, skewedness, kurtosis, maximum and minimum of the study variables, while panel regression was used to test the null hypotheses. Findings of the study revealed that intellectual capital has a negative relationship with litigation risk and IC has positive relationship with financial reporting quality. It is recommended that companies should on creating relational awareness in their employees through adequate training in the aspect of customer relation and proper management of financial and human resources.


Keywords: Earnings Management, Human Resource Accounting, Intellectual Capital, VAIC, human capital efficiency

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