Motivated by agency conflicts of real earnings management and upper echelons in CEO demographic characteristics, this study examines the effect of CEO attributes on real earnings management and addresses the question of whether the presence of an independent board ensures accurate and reliable financial reporting practice. The study also examines the extent to which independent boards moderate the relationship between CEO attributes and real earnings management. Using a sample of 292 observations from Nigeria, an emerging market, from 2018 to 2021, a feasible generalized least square (FGLS) regression model was used to analyze the data. The authors also consider alternative measures of real earnings management. Our results demonstrate that CEO financial expertise, compensation, and CEO nationality reduce real earnings management and improve the financial reporting quality. Accordingly, the results show that independent directors on the board strengthen the CEO’s ability to reduce likely earnings manipulation. However, we find that the presence of a female CEO does not mitigate real earnings manipulation, but that the presence of independent directors enhances the ability of female CEOs to reduce earnings manipulation and produce reliable financial reports. Our results are robust and may have implications for regulators, shareholders, managers, and researchers because it shows that CEO attributes and the presence of independent directors on the board are associated with higher earnings quality.

Purpose: This study examines whether the risk management committee (RMC) mitigates earnings management (EM) in Nigeria.Design/methodology/approach: The study used a sample of 365 firm-year observations of Nigerian-listed nonfinancial companies from 2018 to 2022. Driscoll and Kraay’s fixed-effect standard error regression model is used to test the hypotheses.Findings: The study finds that RMC size, expertise, meeting frequency and membership overlapping with the audit committee have a negative effect on both accrual earnings management (AEM) and real earnings management (REM). While RMC independence is found to have a negative effect on REM. Moreover, additional tests reveal that RMC effectiveness is significantly associated with lower EM practices. Further analysis using the industry level finds that RMC attributes mitigate EM practices in some industries. The results remain after rigorous, robust analysis for endogeneity and alternative regressions.Research limitations/implications: This study is limited to a sample of Nigerian-listed nonfinancial service companies for a period of five years, resulting in the non-generalizability of the findings to different contexts as the countries’ internal policies and regulations varied.Practical implications: The findings have important implications for regulators, policymakers and investors that a stand-alone RMC can effectively help to evaluate potential risk activities and implement a proper risk management system, thereby mitigating EM practices. The result can help investors, analysts and other stakeholders across the international community in considering RMC information to evaluate potential risk and earnings management practices.Originality/value: Following the NCCG 2018 reform in Nigeria that requires listed firms to create a standalone RMC, this study is among the earliest that examines the effect of RMC attributes on EM practices and emerging markets. As such, the findings may draw the attention of regulators and policymakers across the African market and the international community to the monitoring role of RMC attributes in mitigating EM practices.

Aims: The purpose of this study is to examine the effect of audit committee characteristics on real earnings management (REM) through abnormal cash flow from operations of listed companies in Nigeria. The study was conducted on non-financial listed companies in Nigeria for the period of five years (2016-2020). The data were extracted from the sample of firm's annual reports and Thompson Reuters database. Ordinary Least Square (OLS) regression was employed to test the study model. The analysis is based on a sample of 76 listed non-financial companies for five years with 380 firm-year observations. The finding shows that audit committee size and financial expertise reduces management opportunistic earnings manipulations. Also, the result demonstrates that the presence of independent directors in the audit committee is significantly associated with lower earnings management practices. However, the result further establishes that audit committee meeting frequency and real earnings management are positively related. The findings will give an insight to investors, policymakers, and regulators by enabling them to better understand the importance of audit committee in improving the financial reporting quality (FRQ), and the effect of audit committee characteristics in mitigating earnings manipulations.

The purpose of this study is to investigate the effects of political connections and earnings management and to explore the role of the board of directors’ efficacy on the relationship between political connections and earnings management practices. A panel data set of 365 observations from 73 firms (2018 to 2022) listed on the Nigerian Exchange Group (NGX) was used, and the Driscoll and Kraay standard error fixed effect was employed in testing the hypotheses. The findings indicated that politically connected boards are positively associated with accrual earnings management and negatively associated with real earnings management practices. The study also finds that the board of directors’ efficacy is negatively associated with both accrual earnings management and real earnings management activities and thus plays a significant role in strengthening accrual earnings management practices of politically connected boards. The results are robust to alternative accrual earnings management and real earnings management measures. However, following the reformation of the Nigerian Code of Corporate Governance 2018, this study is among the earliest to examine the effects of board efficacy on earnings management of firms with politically connected boards in Nigeria. As such, the findings might have important implications for policymakers, regulators, and investors, as board efficacy is a significant mechanism in strengthening the accrual earnings management practices, thereby curbing the earnings management of politically connected boards. Additionally, this study is limited to a sample of non-financial service firms in Nigeria for a period of 5 years, resulting in the non-generalizability of the findings in different contexts.

Recently, there has been a lot of debate on the issues of earnings management practices. Most of these arguments have been confirmed by past studies in developed economies, where their regulations and institutional settings of corporate governance varied from those of emerging markets. Accordingly, corporate governance best practice has been considered an effective monitoring mechanism for strengthening the credibility and reliability of financial reporting. This study examines the effectiveness of risk management committee (RMC) attributes in mitigating earnings management (EM) practices in Nigeria. The study used a sample of 365 firm-year observations of listed non-financial companies from 2018 to 2022. Driscoll and Kraay’s fixed effect standard error regression model was used to test the hypotheses. The study finds that RMC size and expertise have a negative effect on both AEM and REM. However, RMC independence is found to negative effect on REM only. Moreover, additional test validates that RMC scores (effectiveness) are significantly associated with lower EM practices. Our results are robust under alternative regression and measurements for endogeneity. The findings provide enormous insight to regulators, policymakers, and investors on the ongoing debate surrounding the effectiveness of the RMC attributes in mitigating EM practices, and the effectiveness of the revised NCCG 2018. Besides, the findings will provide important intuition to shareholders, financial analysts, and academia about the effective role of stand-alone RMC.