Corporate Governance a Tool for Curbing Earnings Management Practices in Nigeria: Preparers Perspective

Obigbemi Imoleayo Foyeke, Omolehinwa Eddy Olajide, Mukoro Dick Oluku, Obamiro John Kolade

Abstract


Corporate governance, an end to a means and a means to an end has been said to be a major tool for ensuring transparency
and accountability in the business environment. Adopting the stakeholders theory, we examine the role of corporate
governance in restraining earnings management practices in Nigeria as perceived by the preparers of the report. The study
employed the use of primary data gathered from the research questionnaire administered to 354 sampled preparers of financial
reports in Nigeria. The Pearson Correlation Coefficient and the Ordinary Least Square (OLS) regression was used to evaluate
the relationship between earnings management and corporate governance attributes as identified by the study. The preparers
of financial reports in Nigeria admitted that with effective corporate governance mechanisms in place, earnings management
practices will reduce to the bearest minimum in the country. This study therefore concludes that earnings management
practices can be deterred with effective corporate governance practices in place. It is therefore recommended that regulators at
all levels should ensure strict adherence to the contents of the code of corporate governance as published.

DOI: 10.5901/mjss.2016.v7n2p234


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Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)

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