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The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency

The purpose of this paper is to examine the moderating effect of CEO competency on the relationship between corporate governance (CG) and earnings management (EM) of Nigerian financial firms. The sample covered 37 financial firms listed in the Nigeria Stock Exchange (NSE) from 2010 to 2019. This stu...

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Main Authors: Usaini, Muhammad, Chee, Wooi Hooy
Format: Article
Language:English
Published: Universiti Utara Malaysia Press 2023
Subjects:
HG Finance
Online Access:https://repo.uum.edu.my/id/eprint/29722/1/MMJ%2027%202023%2021-58.pdf
https://doi.org/10.32890%20mmj%202023.27.2
https://repo.uum.edu.my/id/eprint/29722/
https://e-journal.uum.edu.my/index.php/mmj/article/view/17037
https://doi.org/10.32890%20mmj%202023.27.2
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spelling my.uum.repo.297222023-09-06T15:14:20Z https://repo.uum.edu.my/id/eprint/29722/ The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency Usaini, Muhammad Chee, Wooi Hooy HG Finance The purpose of this paper is to examine the moderating effect of CEO competency on the relationship between corporate governance (CG) and earnings management (EM) of Nigerian financial firms. The sample covered 37 financial firms listed in the Nigeria Stock Exchange (NSE) from 2010 to 2019. This study adopted a panel regression estimator to analyse the testable hypotheses. It was found that CEO competency only moderated the relationship between audit committee and EM but not on the other CG variables. This finding implied that CEO competency was important when accounting oversight was in balance with EM. While the agency hypothesis on CG was supported, the study upheld the idea that CEO competency undermined EM. As a result, the study advocates for broader CEO oversight and resource measures, including CEO remuneration and CEO social capital, to lessen the impact of CG in the EM of financial institutions. The effect of the Covid-19 crisis on the link between CG and EM should be the subject of future studies. Future research should examine how the Covid-19 issue affects the CG mechanism’s ability to reduce EM and determine whether the effect is positive or negative. Universiti Utara Malaysia Press 2023 Article PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/29722/1/MMJ%2027%202023%2021-58.pdf Usaini, Muhammad and Chee, Wooi Hooy (2023) The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency. Malaysian Management Journal (MMJ), 27. pp. 21-58. ISSN 0128-6226 https://e-journal.uum.edu.my/index.php/mmj/article/view/17037 https://doi.org/10.32890%20mmj%202023.27.2 https://doi.org/10.32890%20mmj%202023.27.2
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
Usaini, Muhammad
Chee, Wooi Hooy
The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
description The purpose of this paper is to examine the moderating effect of CEO competency on the relationship between corporate governance (CG) and earnings management (EM) of Nigerian financial firms. The sample covered 37 financial firms listed in the Nigeria Stock Exchange (NSE) from 2010 to 2019. This study adopted a panel regression estimator to analyse the testable hypotheses. It was found that CEO competency only moderated the relationship between audit committee and EM but not on the other CG variables. This finding implied that CEO competency was important when accounting oversight was in balance with EM. While the agency hypothesis on CG was supported, the study upheld the idea that CEO competency undermined EM. As a result, the study advocates for broader CEO oversight and resource measures, including CEO remuneration and CEO social capital, to lessen the impact of CG in the EM of financial institutions. The effect of the Covid-19 crisis on the link between CG and EM should be the subject of future studies. Future research should examine how the Covid-19 issue affects the CG mechanism’s ability to reduce EM and determine whether the effect is positive or negative.
format Article
author Usaini, Muhammad
Chee, Wooi Hooy
author_facet Usaini, Muhammad
Chee, Wooi Hooy
author_sort Usaini, Muhammad
title The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
title_short The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
title_full The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
title_fullStr The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
title_full_unstemmed The Effect of Corporate Governance on Earnings Management in Nigeria’s Financial Institutions: Moderating Role of CEO Competency
title_sort effect of corporate governance on earnings management in nigeria’s financial institutions: moderating role of ceo competency
publisher Universiti Utara Malaysia Press
publishDate 2023
url https://repo.uum.edu.my/id/eprint/29722/1/MMJ%2027%202023%2021-58.pdf
https://doi.org/10.32890%20mmj%202023.27.2
https://repo.uum.edu.my/id/eprint/29722/
https://e-journal.uum.edu.my/index.php/mmj/article/view/17037
https://doi.org/10.32890%20mmj%202023.27.2
_version_ 1778165218947366912
score 13.211869

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