Journal of Financial Economics and Accounting, 2024
This study examines whether audit firms and audit committees contribute to enhancing earnings qua... more This study examines whether audit firms and audit committees contribute to enhancing earnings quality in publicly listed companies. It investigates how the index of audit firms (derived from size, opinion, independence, tenure, quality, and rotation) and audit committees (derived from independence, financial expertise, size, meetings, and gender) impact the accuracy and reliability of reported earnings. An empirical approach is employed using a sample of publicly listed companies over five years. The study utilizes a quantitative methodology, conducting regression analyses to evaluate the relationship between audit firm quality, audit committee characteristics, and earnings quality, as measured by accruals-based metrics and earnings restatements. The results suggest that higher-quality audit firms, particularly the Big 4, and more independent and financially expert audit committees are associated with improved earnings quality. The findings show that these factors reduce earnings manipulation, enhance transparency, and foster higher levels of financial reporting reliability. The study is limited by its focus on publicly listed companies, which may not generalize to private firms or those in non-regulated markets. Additionally, the study is restricted to a specific geographical region, limiting crosscountry comparisons. For practitioners, the results highlight the importance of choosing reputable audit firms and ensuring audit committees are composed of independent, financially knowledgeable members to enhance financial reporting quality. The research contributes to greater trust in financial markets by demonstrating that robust governance mechanisms, such as high-quality audits and audit committees, play a vital role in protecting investors' interests and promoting corporate transparency. The study provides evidence that supports strengthening regulatory policies concerning audit firm qualifications and the composition of audit committees to improve corporate governance and protect shareholders. This paper adds value to the existing literature by providing empirical evidence on the combined effect of audit firms and audit committees on earnings quality, offering insights into their complementary roles in enhancing the integrity of financial reporting.
This study investigates the determinants of Environmental, Social, and Governance (ESG) performan... more This study investigates the determinants of Environmental, Social, and Governance (ESG) performance in Nigeria, focusing on factors influencing corporate sustainability practices in this emerging economy. Data were collected from 153 listed companies in Nigeria between 2014 and 2023 using a quantitative research approach. The methodology includes panel data analysis and a multiple regression model to examine the relationship between ESG performance and firm-specific factors such as firm size, profitability, board diversity, board size, board independence, audit quality, and foreign ownership. The findings reveal that audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size positively and significantly impact ESG performance, while firm profitability and leverage show insignificant impacts. The conclusion highlights that ESG performance in Nigeria is largely driven by audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size. The implications of this research are critical for policymakers and business leaders aiming to enhance corporate sustainability. The study suggests that creating policies to incentivize smaller and domestically-owned companies to adopt ESG practices could improve Nigeria's overall sustainability performance. Recommendations include increasing awareness of ESG importance at both the corporate and regulatory levels, promoting board diversity, and providing tax incentives for ESG-compliant firms. The study also encourages foreign investors to play a larger role in driving sustainable business practices. The limitations of the research include its focus on publicly listed firms, which may not represent the entire business landscape in Nigeria, and the exclusion of qualitative insights from corporate managers. Future studies could explore the role of institutional frameworks in ESG adoption. This study contributes original insights into the drivers of ESG performance in Nigeria, a region that has received limited attention in ESG literature, thus offering valuable perspectives for emerging markets.
The study aimed to examine how institutional ownership moderates the relationship between board a... more The study aimed to examine how institutional ownership moderates the relationship between board attributes (such as board independence, board size, and board diversity) and tax aggressiveness in publicly listed companies in Nigeria for a period covering 2014-2023. The study utilized a panel data regression analysis. A sample of 153 publicly listed firms was used, and data on board attributes, institutional ownership, and tax aggressiveness were collected from financial statements, proxy filings, and ownership disclosures. Institutional ownership was treated as a moderating variable in the relationship between board attributes and tax aggressiveness. The study found that institutional ownership significantly moderates the relationship between board independence and tax aggressiveness. Specifically, firms with higher institutional ownership and independent boards exhibited lower tax aggressiveness. However, the moderating effect was insignificant for board size and diversity. Institutional investors' presence can strengthen independent boards' role in curbing tax aggressiveness. However, this effect does not extend to other board attributes such as size and diversity. Policymakers and regulators should consider encouraging institutional ownership as a means to enhance corporate governance and reduce tax aggressiveness. Companies should also prioritize board independence, especially in environments with significant institutional ownership. The study underscores the importance of institutional ownership in corporate governance, particularly in enhancing the effectiveness of independent boards in mitigating aggressive tax strategies. The study's findings are limited to publicly listed companies and may not be generalizable to private firms. Additionally, the study focuses on U.S. firms, and the results may vary in different regulatory environments. This study contributes to the literature by providing empirical evidence on the moderating role of institutional ownership in the relationship between board attributes and tax aggressiveness, a relatively under-explored area in corporate governance research.
This study explores the impact of board financial expertise on the earnings quality of Nigerian l... more This study explores the impact of board financial expertise on the earnings quality of Nigerian listed companies, a critical area of interest given the pervasive concerns about the reliability of financial reporting in emerging markets. Earnings quality, reflecting the accuracy and transparency of reported financial performance, is essential for maintaining investor confidence, supporting effective corporate governance, and ensuring efficient capital market functioning. However, Nigerian firms often grapple with challenges such as weak regulatory enforcement, economic volatility, and corporate governance deficiencies, all of which contribute to low earnings quality. This research investigates whether the presence of financially knowledgeable board members, particularly those with expertise in accounting and finance, can enhance earnings quality in this context. The study employs a robust empirical approach, utilizing data from a sample of Nigerian companies listed on the Nigerian Exchange Group (NGX) over a specified period. The analysis focuses on key metrics of earnings quality, including earnings management practices, accruals quality, and the persistence and predictability of earnings. The findings reveal that board financial expertise is positively associated with higher earnings quality, suggesting that boards with members who possess strong financial acumen are better equipped to oversee financial reporting processes and curb earnings manipulation. This positive relationship is particularly pronounced in firms with larger board sizes and those operating in more regulated industries, where the complexity of financial transactions and reporting demands more rigorous oversight. The study contributes to the growing literature on corporate governance in emerging markets by highlighting the importance of board composition in enhancing financial reporting quality. It offers practical implications for policymakers, regulators, and corporate stakeholders in Nigeria and similar contexts, emphasizing the need for stringent requirements regarding board financial expertise to safeguard earnings quality. Furthermore, the research provides valuable insights for investors, indicating that companies with financially savvy boards may present lower risks of earnings misstatement, thereby improving investment decisions and market confidence. In conclusion, this study underscores the critical role of board financial expertise in promoting high-quality earnings among Nigerian listed companies, advocating for stronger governance structures that prioritize financial competence at the board level to ensure transparency and protect stakeholder interests.
We use the panel regression analysis technique on 1,530 observations to examine the effect of sus... more We use the panel regression analysis technique on 1,530 observations to examine the effect of sustainability committees on the value of 153 publicly listed firms for 10 years (2014-2023). The findings show that sustainability committee presence, independence, and gender are significant in firm value estimation. These findings suggest that companies should consider sustainability committee presence, independence, and gender while seeking to enhance firm value. However, sustainability committee meetings and size fail to show any level of significance. Nevertheless, the study is the first in Nigeria to associate sustainability committees with firm values. Furthermore, the study contributes to the existing literature by looking at the nexus between sustainability committees and firm value. Furthermore, our R-squared is 81.10 percent, which suggests that additional works are required to improve it. We suggest that the period be increased or more countries should be added with similar financial frameworks.
NDA DISCUSSION PAPERS ACCOUNTING & FINANCE GROUP DISCUSSION PAPERS, 2024
This study examines the influence of independent directors on the financial performance of 153 li... more This study examines the influence of independent directors on the financial performance of 153 listed companies on NGX, with a specific focus on the mediating role of CEO tenure. The aim is to determine whether the presence of independent directors can enhance financial outcomes and how CEO tenure mediates this relationship. Methodology: The research employs a quantitative approach, utilizing a sample of publicly listed companies across multiple industries. Data is collected over ten years (2014-2023) and analyzed using panel regression modeling to test the direct impact of independent directors on financial performance and the mediating effect of CEO tenure. Findings: The results indicate that independent directors positively influence financial performance, but this effect is significantly mediated by CEO tenure. Specifically, companies with longer-tenured CEOs benefit more from independent directors in terms of financial performance, suggesting that CEO experience and stability play a critical role in maximizing the value of independent oversight. Practical Implications: The findings suggest that companies should consider both the composition of their boards and the tenure of their CEOs when seeking to enhance financial performance. Firms may benefit from aligning their board structures with the experience levels of their CEOs to optimize governance and financial outcomes. Policy Implications: Policymakers and regulatory bodies should encourage the inclusion of independent directors on corporate boards, especially in firms with long-tenured CEOs. This could improve corporate governance standards and, in turn, financial performance, contributing to broader economic stability. Originality: This study contributes to the existing literature by exploring the nuanced role of CEO tenure as a mediator in the relationship between independent directors and financial performance, offering new insights into corporate governance dynamics.
International Journal of Advanced Multidisciplinary Research and Studies, 2024
There has been increasing attention on risk management which had elicited various responses from ... more There has been increasing attention on risk management which had elicited various responses from several regulators and other interest bodies such as the Basel accord, International financial reporting standard and country's central banks, in which they formulated frameworks for effective management of risks by financial institutions across the world which is expected to improve the performance of such institutions. This study therefore reviewed the effect of the nine risk management variables on the profitability of deposit money banks in Nigeria using Earning Per Share as proxy for profitability and adopting the nine (9) risk management codes of Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Strategic Risk, Solvency Risk. Legal/regulatory/ compliance Risk, Reputational Risk, and Counterparty Risk as independent variables. A sample of 12 banks was adopted from which secondary data covering ten years were extracted and multivariate regression analysis, ordinary least square was used to examine the effect of the risk management variables on earning per shares of the banks. This study found that risk management has a significant positive effect on the profitability of the banks as measured by earnings per share and concludes that paying more attention to the risk management attributes would actually lead to improved performance. Hence, it recommended that executive management of banks and regulators should pay proper attention to risk management as this would eventually lead to improved profitability of the banks.
Journal of Financial Economics and Accounting, 2024
This study examines whether audit firms and audit committees contribute to enhancing earnings qua... more This study examines whether audit firms and audit committees contribute to enhancing earnings quality in publicly listed companies. It investigates how the index of audit firms (derived from size, opinion, independence, tenure, quality, and rotation) and audit committees (derived from independence, financial expertise, size, meetings, and gender) impact the accuracy and reliability of reported earnings. An empirical approach is employed using a sample of publicly listed companies over five years. The study utilizes a quantitative methodology, conducting regression analyses to evaluate the relationship between audit firm quality, audit committee characteristics, and earnings quality, as measured by accruals-based metrics and earnings restatements. The results suggest that higher-quality audit firms, particularly the Big 4, and more independent and financially expert audit committees are associated with improved earnings quality. The findings show that these factors reduce earnings manipulation, enhance transparency, and foster higher levels of financial reporting reliability. The study is limited by its focus on publicly listed companies, which may not generalize to private firms or those in non-regulated markets. Additionally, the study is restricted to a specific geographical region, limiting crosscountry comparisons. For practitioners, the results highlight the importance of choosing reputable audit firms and ensuring audit committees are composed of independent, financially knowledgeable members to enhance financial reporting quality. The research contributes to greater trust in financial markets by demonstrating that robust governance mechanisms, such as high-quality audits and audit committees, play a vital role in protecting investors' interests and promoting corporate transparency. The study provides evidence that supports strengthening regulatory policies concerning audit firm qualifications and the composition of audit committees to improve corporate governance and protect shareholders. This paper adds value to the existing literature by providing empirical evidence on the combined effect of audit firms and audit committees on earnings quality, offering insights into their complementary roles in enhancing the integrity of financial reporting.
This study investigates the determinants of Environmental, Social, and Governance (ESG) performan... more This study investigates the determinants of Environmental, Social, and Governance (ESG) performance in Nigeria, focusing on factors influencing corporate sustainability practices in this emerging economy. Data were collected from 153 listed companies in Nigeria between 2014 and 2023 using a quantitative research approach. The methodology includes panel data analysis and a multiple regression model to examine the relationship between ESG performance and firm-specific factors such as firm size, profitability, board diversity, board size, board independence, audit quality, and foreign ownership. The findings reveal that audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size positively and significantly impact ESG performance, while firm profitability and leverage show insignificant impacts. The conclusion highlights that ESG performance in Nigeria is largely driven by audit quality, board gender diversity, board independence, board size, institutional ownership, and firm size. The implications of this research are critical for policymakers and business leaders aiming to enhance corporate sustainability. The study suggests that creating policies to incentivize smaller and domestically-owned companies to adopt ESG practices could improve Nigeria's overall sustainability performance. Recommendations include increasing awareness of ESG importance at both the corporate and regulatory levels, promoting board diversity, and providing tax incentives for ESG-compliant firms. The study also encourages foreign investors to play a larger role in driving sustainable business practices. The limitations of the research include its focus on publicly listed firms, which may not represent the entire business landscape in Nigeria, and the exclusion of qualitative insights from corporate managers. Future studies could explore the role of institutional frameworks in ESG adoption. This study contributes original insights into the drivers of ESG performance in Nigeria, a region that has received limited attention in ESG literature, thus offering valuable perspectives for emerging markets.
The study aimed to examine how institutional ownership moderates the relationship between board a... more The study aimed to examine how institutional ownership moderates the relationship between board attributes (such as board independence, board size, and board diversity) and tax aggressiveness in publicly listed companies in Nigeria for a period covering 2014-2023. The study utilized a panel data regression analysis. A sample of 153 publicly listed firms was used, and data on board attributes, institutional ownership, and tax aggressiveness were collected from financial statements, proxy filings, and ownership disclosures. Institutional ownership was treated as a moderating variable in the relationship between board attributes and tax aggressiveness. The study found that institutional ownership significantly moderates the relationship between board independence and tax aggressiveness. Specifically, firms with higher institutional ownership and independent boards exhibited lower tax aggressiveness. However, the moderating effect was insignificant for board size and diversity. Institutional investors' presence can strengthen independent boards' role in curbing tax aggressiveness. However, this effect does not extend to other board attributes such as size and diversity. Policymakers and regulators should consider encouraging institutional ownership as a means to enhance corporate governance and reduce tax aggressiveness. Companies should also prioritize board independence, especially in environments with significant institutional ownership. The study underscores the importance of institutional ownership in corporate governance, particularly in enhancing the effectiveness of independent boards in mitigating aggressive tax strategies. The study's findings are limited to publicly listed companies and may not be generalizable to private firms. Additionally, the study focuses on U.S. firms, and the results may vary in different regulatory environments. This study contributes to the literature by providing empirical evidence on the moderating role of institutional ownership in the relationship between board attributes and tax aggressiveness, a relatively under-explored area in corporate governance research.
This study explores the impact of board financial expertise on the earnings quality of Nigerian l... more This study explores the impact of board financial expertise on the earnings quality of Nigerian listed companies, a critical area of interest given the pervasive concerns about the reliability of financial reporting in emerging markets. Earnings quality, reflecting the accuracy and transparency of reported financial performance, is essential for maintaining investor confidence, supporting effective corporate governance, and ensuring efficient capital market functioning. However, Nigerian firms often grapple with challenges such as weak regulatory enforcement, economic volatility, and corporate governance deficiencies, all of which contribute to low earnings quality. This research investigates whether the presence of financially knowledgeable board members, particularly those with expertise in accounting and finance, can enhance earnings quality in this context. The study employs a robust empirical approach, utilizing data from a sample of Nigerian companies listed on the Nigerian Exchange Group (NGX) over a specified period. The analysis focuses on key metrics of earnings quality, including earnings management practices, accruals quality, and the persistence and predictability of earnings. The findings reveal that board financial expertise is positively associated with higher earnings quality, suggesting that boards with members who possess strong financial acumen are better equipped to oversee financial reporting processes and curb earnings manipulation. This positive relationship is particularly pronounced in firms with larger board sizes and those operating in more regulated industries, where the complexity of financial transactions and reporting demands more rigorous oversight. The study contributes to the growing literature on corporate governance in emerging markets by highlighting the importance of board composition in enhancing financial reporting quality. It offers practical implications for policymakers, regulators, and corporate stakeholders in Nigeria and similar contexts, emphasizing the need for stringent requirements regarding board financial expertise to safeguard earnings quality. Furthermore, the research provides valuable insights for investors, indicating that companies with financially savvy boards may present lower risks of earnings misstatement, thereby improving investment decisions and market confidence. In conclusion, this study underscores the critical role of board financial expertise in promoting high-quality earnings among Nigerian listed companies, advocating for stronger governance structures that prioritize financial competence at the board level to ensure transparency and protect stakeholder interests.
We use the panel regression analysis technique on 1,530 observations to examine the effect of sus... more We use the panel regression analysis technique on 1,530 observations to examine the effect of sustainability committees on the value of 153 publicly listed firms for 10 years (2014-2023). The findings show that sustainability committee presence, independence, and gender are significant in firm value estimation. These findings suggest that companies should consider sustainability committee presence, independence, and gender while seeking to enhance firm value. However, sustainability committee meetings and size fail to show any level of significance. Nevertheless, the study is the first in Nigeria to associate sustainability committees with firm values. Furthermore, the study contributes to the existing literature by looking at the nexus between sustainability committees and firm value. Furthermore, our R-squared is 81.10 percent, which suggests that additional works are required to improve it. We suggest that the period be increased or more countries should be added with similar financial frameworks.
NDA DISCUSSION PAPERS ACCOUNTING & FINANCE GROUP DISCUSSION PAPERS, 2024
This study examines the influence of independent directors on the financial performance of 153 li... more This study examines the influence of independent directors on the financial performance of 153 listed companies on NGX, with a specific focus on the mediating role of CEO tenure. The aim is to determine whether the presence of independent directors can enhance financial outcomes and how CEO tenure mediates this relationship. Methodology: The research employs a quantitative approach, utilizing a sample of publicly listed companies across multiple industries. Data is collected over ten years (2014-2023) and analyzed using panel regression modeling to test the direct impact of independent directors on financial performance and the mediating effect of CEO tenure. Findings: The results indicate that independent directors positively influence financial performance, but this effect is significantly mediated by CEO tenure. Specifically, companies with longer-tenured CEOs benefit more from independent directors in terms of financial performance, suggesting that CEO experience and stability play a critical role in maximizing the value of independent oversight. Practical Implications: The findings suggest that companies should consider both the composition of their boards and the tenure of their CEOs when seeking to enhance financial performance. Firms may benefit from aligning their board structures with the experience levels of their CEOs to optimize governance and financial outcomes. Policy Implications: Policymakers and regulatory bodies should encourage the inclusion of independent directors on corporate boards, especially in firms with long-tenured CEOs. This could improve corporate governance standards and, in turn, financial performance, contributing to broader economic stability. Originality: This study contributes to the existing literature by exploring the nuanced role of CEO tenure as a mediator in the relationship between independent directors and financial performance, offering new insights into corporate governance dynamics.
International Journal of Advanced Multidisciplinary Research and Studies, 2024
There has been increasing attention on risk management which had elicited various responses from ... more There has been increasing attention on risk management which had elicited various responses from several regulators and other interest bodies such as the Basel accord, International financial reporting standard and country's central banks, in which they formulated frameworks for effective management of risks by financial institutions across the world which is expected to improve the performance of such institutions. This study therefore reviewed the effect of the nine risk management variables on the profitability of deposit money banks in Nigeria using Earning Per Share as proxy for profitability and adopting the nine (9) risk management codes of Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Strategic Risk, Solvency Risk. Legal/regulatory/ compliance Risk, Reputational Risk, and Counterparty Risk as independent variables. A sample of 12 banks was adopted from which secondary data covering ten years were extracted and multivariate regression analysis, ordinary least square was used to examine the effect of the risk management variables on earning per shares of the banks. This study found that risk management has a significant positive effect on the profitability of the banks as measured by earnings per share and concludes that paying more attention to the risk management attributes would actually lead to improved performance. Hence, it recommended that executive management of banks and regulators should pay proper attention to risk management as this would eventually lead to improved profitability of the banks.
Uploads
Papers
Methodology: The research employs a quantitative approach, utilizing a sample of publicly listed companies across multiple industries. Data is collected over ten years (2014-2023) and analyzed using panel regression modeling to test the direct impact of independent directors on financial performance and the mediating effect of CEO tenure.
Findings: The results indicate that independent directors positively influence financial performance, but this effect is significantly mediated by CEO tenure. Specifically, companies with longer-tenured CEOs benefit more from independent directors in terms of financial performance, suggesting that CEO experience and stability play a critical role in maximizing the value of independent oversight.
Practical Implications: The findings suggest that companies should consider both the composition of their boards and the tenure of their CEOs when seeking to enhance financial performance. Firms may benefit from aligning their board structures with the experience levels of their CEOs to optimize governance and financial outcomes.
Policy Implications: Policymakers and regulatory bodies should encourage the inclusion of independent directors on corporate boards, especially in firms with long-tenured CEOs. This could improve corporate governance standards and, in turn, financial performance, contributing to broader economic stability.
Originality: This study contributes to the existing literature by exploring the nuanced role of CEO tenure as a mediator in the relationship between independent directors and financial performance, offering new insights into corporate governance dynamics.
Methodology: The research employs a quantitative approach, utilizing a sample of publicly listed companies across multiple industries. Data is collected over ten years (2014-2023) and analyzed using panel regression modeling to test the direct impact of independent directors on financial performance and the mediating effect of CEO tenure.
Findings: The results indicate that independent directors positively influence financial performance, but this effect is significantly mediated by CEO tenure. Specifically, companies with longer-tenured CEOs benefit more from independent directors in terms of financial performance, suggesting that CEO experience and stability play a critical role in maximizing the value of independent oversight.
Practical Implications: The findings suggest that companies should consider both the composition of their boards and the tenure of their CEOs when seeking to enhance financial performance. Firms may benefit from aligning their board structures with the experience levels of their CEOs to optimize governance and financial outcomes.
Policy Implications: Policymakers and regulatory bodies should encourage the inclusion of independent directors on corporate boards, especially in firms with long-tenured CEOs. This could improve corporate governance standards and, in turn, financial performance, contributing to broader economic stability.
Originality: This study contributes to the existing literature by exploring the nuanced role of CEO tenure as a mediator in the relationship between independent directors and financial performance, offering new insights into corporate governance dynamics.