Akinwumi, Taleatu and Covenant University, Theses (2020) UPPER ECHELONS CHARACTERISTICS AND EARNINGS MANAGEMENT IN TROUBLED NON-LISTED COMPANIES IN NIGERIA. ["eprint_fieldopt_thesis_type_engd" not defined] thesis, COVENANT UNIVERSITY.
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Abstract
Research has shown that companies in financial crises are usually successful in hiding their poor performance through aggressive earnings management. However, while research on negative earnings management practices has been generally directed towards the listed companies, these practices have been less examined in non-listed companies. The main objective of this study is to investigate the effect of the upper echelons' characteristics (UEC) on earnings management (EM) in selected troubled non-listed companies in Nigeria and examines the moderating effect of corporate governance quality (CGQ) on this relationship. To achieve the objective, a descriptive research design involving the survey method was explored. Using the Yamane's 1967 sampling size formula, 80 non-listed companies were selected from the list of 98 non-listed companies among the chronic debtors of Assets Management Corporation of Nigeria (AMCON). Copies of a questionnaire were administered on 240 participants (3 participants per company) including the chief financial officers (CFOs). Out of the 219 copies of the questionnaire retrieved, 204 copies, representing an 85.0% response rate were found suitable for data analysis. The research questions were answered by computing means and standard deviations while the hypotheses were tested with simple, multiple, step-wise and moderated regressions as well as structural equation modeling (SEM). Specifically, findings revealed significant positive relationships between corporate earnings management and the age (beta=.166, t = 2.760, P<.05, Sig. 0.006), tenure (beta=.412, t = 6.861, P<.05, Sig. 0.000), educational level (beta=.345, t = 6.484, P<.05, Sig. 0.000), gender (beta=.156, t = 2.964, P<.05, Sig. 0.003) and the personality traits (beta=.693, t = 12.527, P<.01, Sig. 0.000) of the CFOs. Hence, matured, male and long-tenured CFOs as well as the CFOs without postgraduate degree in relevant disciplines were implicated in aggressive earnings management. However, upper echelons' leadership styles were found non-significant in negative earnings management prediction (beta=.075, t = .769, P>.05, Sig. = .086). CGQ was found to be exerting a significant moderating effect on the observed upward earnings management attributable to the CFOs’ age (beta=.-196, t = -2.895, P<.05, Sig. = .002), gender (beta=.-250, -3.807, P<.05, Sig. = .001), educational level (beta=.-367, -5.980, P>.05, Sig. = .000), tenure (beta=.-504, -6.998, P<.05, Sig. = .000) and personality traits (beta=.-665, -8.549, P<.05, Sig. = .000). This result implies that high corporate governance quality can reverse the observed unethical corporate earnings management practices. Generally, findings revealed a relatively high level of earnings management which has significant positive relationships with the upper echelons' demographic characteristics and personality traits. It was concluded that the demographic and psychological characteristics of the top-level officials significantly predict the level of corporate earnings management. This study recommends the appointment of more middle-aged, female individuals with an advanced degree in financial-related disciplines as CFOs. Personality traits test is also advanced for the screening of individuals for upper echelons' positions. The study further recommends the formulation of an abridged, easy-to-implement code of corporate governance for non-listed companies in Nigeria.
| Item Type: | Thesis (["eprint_fieldopt_thesis_type_engd" not defined]) |
|---|---|
| Uncontrolled Keywords: | Corporate governance quality; demographics characteristics; earnings management; leadership styles; personality traits; troubled companies |
| Subjects: | H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | Mrs Hannah Akinwumi |
| Date Deposited: | 17 Feb 2021 16:01 |
| Last Modified: | 17 Feb 2021 16:01 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/13841 |
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