MANAGERIAL CHARACTERISTICS AND REAL EARNINGS MANAGEMENT
Tina O. Ashafoke and Godstime O. Ikhu-Omoregbe
Volume 9 Issue 2
Abstract
The study examined the relationship that exists between managerial characteristics and real earnings management using quoted manufacturing companies in Nigeria. The study examined the impact of managerial tenure, managerial financial expertise, managerial overconfidence and managerial board membership on real earnings management. Data was gathered from 25 quoted manufacturing companies. Secondary data was derived from annual reports of over 8 years for the period of 2014-2021. The panel regression analysis approach will be used to test the hypotheses and measure the relationship between the variables. Descriptive statistics, correlational analysis and test of normality of the variables were also used to further measure the variables. Results from the analysis shows that: there exists a negative and insignificant relationship between managerial tenure and REM, there exists a negative and significant relationship between managerial financial expertise and REM, there exists a negative and insignificant relationship between managerial overconfidence and REM and there exists a negative and insignificant relationship between managerial board membership and REM. The study concludes that there is a significant relationship managerial financial expertise and real earnings management on quoted Nigerian manufacturing companies. The study recommends that managers with a high level of financial expertise be appointed to prevent real earnings management. It also recommends that organizations should pay closer look to overconfident managers as they possess the tendency to overestimate their ability to generate returns. Keywords: Managerial Board Membership, Managerial Financial Expertise, Managerial Overconfidence, Managerial Tenure, Real Earning Management.
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