AN EVALUATION OF THE IMPLICATIONS OF EARNINGS EARNING MANAGEMENT DETERMINANTS IN THE BANKING INDUSTRY: THE CASE OF NIGERIA
 /  AN EVALUATION OF THE IMPLICATIONS OF EARNINGS EARNING MANAGEMENT DETERMINANTS IN THE BANKING INDUSTRY: THE CASE OF NIGERIA

AN EVALUATION OF THE IMPLICATIONS OF EARNINGS EARNING MANAGEMENT DETERMINANTS IN THE BANKING INDUSTRY: THE CASE OF NIGERIA

DABOR, Eyesan Leslie and IBADIN, Peter Okoeguale

ABSTRACT
The objective of this paper was to ascertain the determinants of earnings management and to evaluate their implications. The study covered a period of 2005-2010. There were a total of twenty-three twenty three banks quoted on the stock exchange within the period. The study  selected a sample of all eighteen of these banks quoted on the stock exchange as at 2010. The Pearson Product Moment Correlation was used to identify the determinants of earnings management. The results showed that audit committee size (AUDCOM), audit fee (AUDFEE), bank asset quality (BANKQUA), bank size (BANKSIZ) ) and board size (BSIZE) were all negatively correlated with abnormal loan loss provisions (ABBL). Other variables including auditor change (AUDCH), bank complexity (BANKCOMP), bank performance (BANKPER), board composition (BCOMP), director shareholding (DSHAR), and bank leverage (LEV) were positively correlated. The study recommended that audit committee size should be increased, bank inspector should focus on asset quality and leverage of the bank, and both bank size and board size should be increased. Furthermore, mandatory auditor rotation was unnecessary. Furthermore, non executive directors should be  appointed on the basis of competence while directors’ shareholding should be balanced with other shareholdings.

Journal Article
PDF, 295.5 KB
Creative Commons LicenseCreative Commons license
Accounting, Banking and Finance
Accounting
Earnings Management, Corporate Governance, Audit Quality.
Christian Bassey
18th April, 2018
18th April, 2018
http://oer.mciu.edu.ng/wp-content/uploads/2015/04/82DABOR.pdf


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