EFFECTS OF BOARD DIVERSITY AND AUDIT COMMITTEE ATTRIBUTES ON EARNINGS MANAGEMENT OF LISTED CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA

Abstract

The literature on corporate governance and audit committee attribute is becoming more and more interested in how the distinctive qualities of women in senior executive roles influence organizational outcomes and decision-making. The issue of board diversity as drivers of effective corporate governance as well as audit committee attributes has continued to be a subject of debate among professionals, practitioners and players in the manufacturing sector. Therefore, the study examined the combined effect effects of board diversity and audit committee attributes on earnings management of listed consumer goods manufacturing companies in Nigeria. There present study therefore examined audit committee characteristics of listed consumer goods manufacturing. The study adopts expost facto research design whereby data was sourced mainly from the audited annual financial reports of selected consumer goods manufacturing firms on the Nigerian Exchange Group for the period 2004-2022. The population of the study consists of twenty one (21) consumer goods manufacturing firms in Nigeria as at 2024. The sample size of ten (10) consumer goods manufacturing firms in Nigeria was arrived at using purposive sampling technique whereby consumer goods manufacturing firms which have their annual report and accounts readily accessible for the study period were selected. Analytical techniques used in the study consist of both descriptive and inferential statistics. Descriptive statistics employed include minimum, maximum, mean and standard deviation while Pearson Product Moment Correlation (PPMC) was used to examine the combined effect effects of board diversity and audit committee attributes on earnings management of listed consumer goods manufacturing companies in Nigeria. Findings from the result of PPMC on the combined effect effects of board diversity and audit committee attributes on earnings management of listed consumer goods manufacturing companies in Nigeria showed that the correlation coefficient of 0.4751 indicates a moderate positive relationship between audit committee size and earnings management. Larger audit committees are more effective in overseeing financial reporting, but this may also correlate with more complex earnings management practices. Based on the findings, the study therefore concluded that board diversity and audit committee attributes have significant effect on earnings management. The study recommends that companies should evaluate both board and audit committee characteristics simultaneously to identify how their combined attributes influence earnings management. This will help design a more integrated governance framework.