Authors: Adigwe Pretty Dennis
Abstract
Earnings management has become a critical area of study within the realms of accounting and corporate governance. This study investigates the relationship between corporate governance mechanisms and earnings management practices in publicly traded companies. Utilizing a quantitative approach, data was analysed from a sample of two hundred (200) publicly traded firms over a five-year period (2018-2022), employing regression analysis to identify the impact of governance structures on the likelihood of earnings manipulation. It discusses the motivations behind earnings management, the influence of governance structures on managerial behaviour, and the implications for stakeholders. The findings underscore the need for robust governance frameworks to mitigate earnings manipulation and enhance financial transparency. The findings from this study indicate that stronger corporate governance is associated with reduced earnings management, suggesting that effective governance mechanisms can enhance financial transparency and accountability.
Keywords: Earnings management, Corporate governance, Agency theory.