EFFECT OF BOARD SIZE ON EARNINGS MANAGEMENT OF FAST MOVING CONSUMER GOODS FIRMS IN NIGERIA
Fast Moving Consumer Goods (FMCG) firms are faced with an obligation to report positive earnings growth and also meet analysts’ forecasts. However, economic and operational issues could cause a company to report otherwise, thereby, encouraging managers to manipulate earnings in an attempt to make the company appear to meet its shareholder’s expectations. Corporate governance mechanisms are potent means of curbing these manipulations so as to ensure quality financial reporting. This research considered whether there was a significant relationship between board size and earnings management in fast moving consumer goods firms in Nigeria. The study had a sample size of 15 listed fast moving consumer goods firms in Nigeria. The data analyzed in this study were collected from the annual reports of the 15 listed firms for the period 2012 to 2015 using multiple linear regression models. Ordinary Least Square regression analysis was employed. Data were analysed using the STATA 13.0 software and excel spreadsheet. Diagnostic tests were also carried out to test the robustness of the research instruments. Findings from the study showed that board size were positively related to earnings management. The study concluded that limiting the number of members on the board in fast moving consumer goods firms will help in regulating earnings management in the sector.
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