Impact Of Corporate Governance Mechanism on Earnings Management of Listed Deposit Money Banks in Nigeria.

Abstract

This study examines the impact of corporate governance mechanism on earnings management of listed deposit money banks in Nigeria. The study uses quantitative research design as well as panel data for the period of seventeen years spanning from 2008 to 2024. The study utilized all fourteen listed deposit money banks in Nigeria. Panel regression analysis was used and the results revealed that board independence has a negative significant effect on earnings management of listed deposit money banks in Nigeria. Ownership concentration has a positive significant effect on earnings management of listed deposit money banks in Nigeria. Thus, the study concluded that income smoothing in listed deposit money banks in Nigeria decreases with increase in the number of non-executive directors on the board. The study also concluded that the presentation of falsified financial reports increases when the number of shares owned by controlling shareholders increases. In line with these findings, the study recommended that regulators should review the criteria for identifying independent directors, introduce tenure limits to prevent familiarity threats, and continuously evaluate director performance, while banks should prioritize the appointment of independent directors with proven ethical standards and industry experience. The study also recommended that regulators should enforce stricter disclosure requirements, strengthen safeguards against related-party transactions, and enhance minority shareholder protection to reduce undue influence on financial reporting processes.