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

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