For correspondence:-
Received: 18 April 2018 Accepted: 23 May 2018 Published: 30 June 2018
Citation: Ownership Structure and Earnings Management: Evidence from Nigerian Listed Firms. Account Tax Rev 2003; 2(2):57-74 doi:
© 2003 The authors.
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Abstract
The credibility and reliability of the primary objective of external financial reporting has been questioned by many users of financial reports because of the effect of earnings management on the information contentof such reports. Therefore, the study investigates the impact of ownership structure on earnings management in Nigeria.The study makes use of data obtained from secondary source and employs a longitudinal panel research as the research design for a sample of 75 quoted firms for the period 2009 to 2014. Also, descriptive statistics and Pearson correlation analysis were conducted. Relevant residual diagnostic tests were also conducted.The result reveals that managerial ownership is negatively and significantly related to earnings management while institutional ownership and foreign ownership exhibit a positive but insignificant. The study, therefore, recommends that firms should consider improving managerial ownership by issuing policy statement requiring managers and executive directors to have more equity shares. In addition, there may be a need for companies to have a high percentage of institutional ownership especially participatory institutional ownership that can influence efficient monitoring and reduce earnings management.
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