Corporate Governance and Earnings Management in Deposit Money Banks in Nigeria

This study examines corporate governance and earnings management in deposit money banks in Nigeria. The aim of the study was to examine corporate governance and earnings management in deposit money banks in Nigeria. The study was guided by the following specific objectives; to examine the relationship between size and discretionary loan loss provisions in deposit money banks in Nigeria, to determine the relationship between audit committee independence and discretionary loan loss provisions in deposit money banks in Nigeria and to evaluate the relationship between risk management committee independence and discretionary loan loss provisions in deposit money banks in Nigeria. The ex-post facto research design was adopted. The population and sample size of the study is 12 listed deposit money banks in Nigeria stock exchange. The instrument of the study was secondary data. The study adopted descriptive statistics for the research questions and simple regression analysis for the hypotheses. The findings of the study among others were that there is significant relationship between size and discretionary loan loss provisions in deposit money banks in Nigeria. Meanwhile, there is no significant relationship between audit committee independence and discretionary loan loss provisions in deposit money banks in Nigeria. Also, there is no significant relationship between Risk management committee independence and discretionary loan loss provisions in deposit money banks in Nigeria. On the basis of the findings, the following recommendations were proffered among others that; companies and Allied Matters act (CAMA) and other regulatory bodies should maintain board size of deposit money banks it checkmates discretionary loan loss provisions in in Nigeria. The study showed that audit committee independence not significantly consequently, there is the need for management to accord more independence to the audit committee in order to enable it curb earnings management practices. The study found that risk management committee independence not significantly affects earnings management and discretionary loan loss provisions; thus, it is recommended that the firms should further strengthen their risk management committee by way of increasing their independence and size, since banks are characterized by risky assets.