The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria

The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria

Managers in large organizations may manipulate earnings reports to suit their desire at the detriment of shareholders and other stakeholders. This may threaten the continuous survival of the organizations. To protect their interest shareholders through the board mandate audit committee to monitor th...

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Main Author: Dakata, Musa Nura
Format: Thesis
Language:eng
eng
Published: 2018
Subjects:
HF5667 Professional Ethics
Auditors.
Online Access:https://etd.uum.edu.my/7612/1/s96170_01.pdf
https://etd.uum.edu.my/7612/2/s96170_02.pdf
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Kamardin, Hasnah
Abdul Malak, Siti Seri Delima
topic HF5667 Professional Ethics
Auditors.
spellingShingle HF5667 Professional Ethics
Auditors.
Dakata, Musa Nura
The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
description Managers in large organizations may manipulate earnings reports to suit their desire at the detriment of shareholders and other stakeholders. This may threaten the continuous survival of the organizations. To protect their interest shareholders through the board mandate audit committee to monitor the financial reporting process. The objective of this study is to examine a relationship between audit committee and external audit characteristics and earnings management in Nigeria. The study also investigates the moderating role of foreign ownership on the relationship between audit committee and external audit characteristics and earnings management. In addition, it also investigates the extent of earnings management before and after the revision of the code of corporate governance. Secondary data is collected for a sample of 93 nonfinancial public companies listed in the Nigerian Stock Exchange (NSE) for the period of 2009-2014. This study conducts multiple linear regressions using pooled OLS. Earnings management is measured by the level of discretionary accruals using modified Jones model (1995). Audit committee and external audit characteristics are discussed from the perspective of agency theory and resource dependence theory. The study finds that the size and independence of audit committee and external auditors’ type are negatively related to earnings management before and after the moderation; audit committee overlapping positively affects earnings management before and after the moderation; while external auditors’ independence and female director in audit committee positively affect earnings management prior to moderation; audit committee meeting is negatively related to earnings management only after the moderation. The study also finds higher earnings management prior to the revision of corporate governance code. This study recommends further policies that will increase foreign ownership in firms because it enhances corporate governance mechanisms and boosts the economy of the country.
format Thesis
qualification_name Ph.D.
qualification_level Doctorate
author Dakata, Musa Nura
author_facet Dakata, Musa Nura
author_sort Dakata, Musa Nura
title The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
title_short The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
title_full The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
title_fullStr The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
title_full_unstemmed The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria
title_sort moderating effect of foreign ownership on audit committee characteristics and earnings management in nigeria
granting_institution Universiti Utara Malaysia
granting_department Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
publishDate 2018
url https://etd.uum.edu.my/7612/1/s96170_01.pdf
https://etd.uum.edu.my/7612/2/s96170_02.pdf
_version_ 1747828242421645312
spelling my-uum-etd.76122021-08-09T06:33:42Z The moderating effect of foreign ownership on audit committee characteristics and earnings management in Nigeria 2018 Dakata, Musa Nura Kamardin, Hasnah Abdul Malak, Siti Seri Delima Tunku Puteri Intan Safinaz School of Accountancy (TISSA) Tunku Intan Safinaz School of Accountancy (TISSA) HF5667 Professional Ethics. Auditors. Managers in large organizations may manipulate earnings reports to suit their desire at the detriment of shareholders and other stakeholders. This may threaten the continuous survival of the organizations. To protect their interest shareholders through the board mandate audit committee to monitor the financial reporting process. The objective of this study is to examine a relationship between audit committee and external audit characteristics and earnings management in Nigeria. The study also investigates the moderating role of foreign ownership on the relationship between audit committee and external audit characteristics and earnings management. In addition, it also investigates the extent of earnings management before and after the revision of the code of corporate governance. Secondary data is collected for a sample of 93 nonfinancial public companies listed in the Nigerian Stock Exchange (NSE) for the period of 2009-2014. This study conducts multiple linear regressions using pooled OLS. Earnings management is measured by the level of discretionary accruals using modified Jones model (1995). Audit committee and external audit characteristics are discussed from the perspective of agency theory and resource dependence theory. The study finds that the size and independence of audit committee and external auditors’ type are negatively related to earnings management before and after the moderation; audit committee overlapping positively affects earnings management before and after the moderation; while external auditors’ independence and female director in audit committee positively affect earnings management prior to moderation; audit committee meeting is negatively related to earnings management only after the moderation. The study also finds higher earnings management prior to the revision of corporate governance code. This study recommends further policies that will increase foreign ownership in firms because it enhances corporate governance mechanisms and boosts the economy of the country. 2018 Thesis https://etd.uum.edu.my/7612/ https://etd.uum.edu.my/7612/1/s96170_01.pdf text eng public https://etd.uum.edu.my/7612/2/s96170_02.pdf text eng public http://sierra.uum.edu.my/record=b1698401~S1 Ph.D. doctoral Universiti Utara Malaysia Abbadi, S. S., Hijazi, Q. F., & Al-Rahahleh, A. S. (2016). Corporate governance quality and earnings management: Evidence from Jordan. Australasian Accounting Business & Finance Journal, 10(2), 54. Abbott, L. J., & Parker, S. (2000). Auditor selection and audit committee characteristics. Auditing: A Journal of Practice & Theory, 19(2), 47-66. Abbott, L. J., Parker, Y., & Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. Managerial Finance, 26(11), 55-68. Abbott, L. J., Parker, S., Peters, G. F., & Raghunandan, K. (2003). 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