CORPORATE GOVERNANCE AND FINANCIAL STATEMENTS’ FRAUD LIKELIHOOD IN LISTED NON-FINANCIAL FIRMS IN NIGERIA

Files

CORPORATE GOVERNANCE AND FINANCIAL STATEMENTS’ FRAUD LIKELIHOOD.pdf (390.1 KB)

Date

2020-03-01

Authors

Journal Title

Journal ISSN

Volume Title

Publisher

Department of Banking and Finance, Nasarawa State University Keffi

Abstract

This study examines the effect of corporate governance on the financial statement fraud likelihood for listed non-financial firms in Nigeria. From the population of 117 non-financial firms quoted on the Nigerian stock exchange as at 2016, a sample of 32 firms were drawn and data from their financial statements were analysed using binary logistic panel regression. The Beneish Score, as the dependent variable was used to classify firms into manipulators (fraud) and non-manipulators (non-fraud). Firms with Beneish score above -2.22 are manipulators and those below are non-manipulators. The finding suggests that board size, board independent, gender diversity, audit committee and board meetings are negatively and significantly related to fraud likelihood. Only board remuneration is positively and significantly related to fraud. This study recommends that Board size of the deposit money banks in Nigeria should be optimum as increasing it affects board remuneration significantly.

Description

Keywords

beneish m-score; corporate governance; financial statements; fraud likelihood; nonfinancial firms; manipulators; board size; board independent; gender diversity; audit committee; board remuneration; board meetings; Nigeria

Citation

Abbott, L. J., Park, Y., and Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. Managerial Finance, 26(11), 55-67 Abbott, L. J., Parker, S., and Peters, G. F. (2004). Audit committee characteristics and restatements. Auditing: Journal of Practice and Theory, 23(1), 69-89. Agrawal, A., and Chadha, S. (2005). Corporate governance and accounting scandals. Journal of Law and Economics, 48(2), 371-406. AICPA (1997). Consideration of Fraud in a Financial Statement Audit, Statement on Auditing Standards No. 82, American Institute of Certified Public Accountants, New York, NY. Alves, S.M.G. (2011). The effect of the board structure on earnings management: evidence from Portugal. Journal of Financial Reporting and Accounting, 9, 141-160

URI

https://keffi.nsuk.edu.ng/handle/20.500.14448/929

Collections

Articles