Ownership Structure and Earnings Management of Listed Conglomerates in Nigeria

  • Musa Adeiza Farouk Department of Accounting, Ahmadu Bello University
  • Nafiu Muhammad Bashir Department of Business Administration, Ahmadu Bello University
Keywords: Ownership Structure, Earnings Management, Listed Conglomerates, Developing Country


Earnings management is a critical issue in developed and developing countries. In Nigeria, the issue is left under the disguise of business ethics. Only the financial sector of the economy is under close surveillance to check the earning management excesses. Even though earning management does not violate accounting rules, its practice is ethically questionable. Therefore, the study examines the effect of ownership structure on earnings management of listed conglomerates in Nigeria. Ownership structure is represented with managerial ownership, institutional ownership, block ownership and foreign ownership, while earnings management is measured using modified Jones model by Dechow, Sloan and Sweeney (1995). The robust ordinary least square technique was used while Stata 13 was adopted as a tool for the analysis. Data were obtained from the secondary source through the firm’s annual reports and accounts. The entire six listed conglomerates on the Nigerian Stock Exchange were used covering the period 2008-2014. The findings show that managerial ownership and ownership concentration have a significant and negative effect on earnings management of listed conglomerates in Nigeria, while foreign ownership recorded positive and significant effect on earnings management of firms, institutional ownership was however reported to have an insignificant but negative influence on earnings management. The study, therefore, recommends that management should be encouraged to have more interest through shares in the organisation as it enables them to have more sense of belonging, which in turn will help mitigate their opportunistic tendencies.


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How to Cite
Farouk, M. A., & Bashir, N. M. (2017). Ownership Structure and Earnings Management of Listed Conglomerates in Nigeria. Indian-Pacific Journal of Accounting and Finance, 1(4), 42-54. https://doi.org/10.32890/ipjaf.2017.1.4.27
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