MONITORING ATTRIBUTES AND EARNINGS QUALITY OF LISTED CONGLOMERATE FIRMS IN NIGERIA

Abstract

This paper examines the effect of monitoring characteristics on earnings quality of listed conglomerate firms in Nigeria for the period of ten years from 2010-2019. As at 31st December, 2019, there were six (6) listed conglomerate firms in Nigeria and all were selected to serve as the sample using census approach. Three variables independent directors, audit committee and institutional ownership were used to represent monitoring characteristics. The Francis et al (2005) model was used as measure of earnings quality. Multiple panel regression was used to test the model of the study using Ordinary Least Square OLS regression and data was collected from the annual reports and accounts of the sampled firms. The findings of the paper revealed that two of the monitoring characteristics variables (IND and INST) positively and significantly affect earnings quality while AC has a significant but negative effect on earnings quality of listed conglomerate firms in Nigeria. It is therefore recommended that, board of directors of listed conglomerate firms should compose more of independent directors as it was found to have a significant positive influence on earnings quality, also their ownership structure should comprise more institutional shareholders as it has been found to improve earnings quality positively.

Keywords

• Monitoring characteristics
• s, Earnings quality
• Conglomerates firms