International Journal of Research and Innovation in Social Science (IJRISS) |Volume VI, Issue XII, December 2022|ISSN 2454-6186
Olusola LODIKERO1, Kazeem A. SOYINKA2, Oluwafemi M. SUNDAY2
1Department of Accountancy, Rufus Giwa Polytechnic, Owo, Ondo State. Nigeria
2Department of Taxation, Rufus Giwa Polytechnic, Owo, Ondo State. Nigeria
Abstract: Many studies have appeared in recent years concerning CEO attributes and earnings management in both developed and developing economies. While many of those studies have provided empirical evidence on CEO attributes and earnings management. There are extensive studies CEO attributes and earnings management in developed economies. In contrast, there is a dearth of research on the subject in developing economies (e.g. Nigeria). The present study empirically examined the CEO attributes and earnings management in Nigeria. Secondary data were used for a for a 10-year period (2012-2021), the study and the data were sourced from annual reports of 13 deposit money banks listed on the Nigeria Exchange Group (NEG) as at 31st December, 2021. In determining the dependent variable, discretionary accruals through modified Jones model was used while CEO age, CEO tenure and CEO gender was used to examine CEO attributes. The study utilized panel data analysis with the application of ordinary least square (OLS) regression to test the hypotheses and to ascertain the significant relationship between CEO age, CEO tenure, CEO gender and earnings management of listed deposit money banks in Nigeria. The findings revealed a significant negative relationship between CEO age and earnings management, while CEO tenure and CEO gender were statistically non-significant in explaining variations in earnings management of listed deposit money banks in Nigeria. The study concludes that CEOs age are the strong drivers of earnings management. Therefore, the study recommends that listed deposit money banks in Nigeria should focus on CEOs age as the major criteria for CEO selection or reselection, while less emphasis should be placed on tenure and gender.
Keywords: Agency theory, CEO age, CEO tenure, CEO gender, discretionary accruals, earnings management,
I. INTRODUCTION
Earnings is one of the most important items in the financial statement, which portrays the extent to which the management has fared in managing the resources of the shareholders by indicating whether or not value has been added to their wealth. In the event of downturn in business activities, there is the likelihood that the management may engage in earnings management (hereafter, EM) in order not to exhibit the poor performance-status of the company (Saidu et al., 2017). This is usually so since generally accepted accounting principles (GAAP) allow management some degree of flexibility or discretion as regards financial information disclosure and reporting. Earnings management (EM) can thus be described as attempts by management to alter companies’