Corporate governance and earnings quality: evidence from consumer goods firms in Nigeria

This study examined the effect corporate governance and earnings quality: evidence from consumer goods firms in Nigeria for a period of 10years, 2015-2024. To achieve this objective, Earnings per share (EPS), served as the dependent variables for this study proxy for earnings quality, while board size (BSIZE), board gender diversity (BGDIV) and audit committee independence (ACIND) served as the independent variables. Ex-post-facto research design was utilized for this study. Data used were sourced from Annual Reports and Accounts of the 17 out of 21 consumer goods firms quoted on the Nigeria Exchange Group. Descriptive statistics, Phillips-Perron (PPT) Unit root test, Johansen Co-integration, Granger causality and Ordinary least square regression (OLS) were the analytical tools for this study. The results revealed that the variables were normally distributed, and there was a causal relationship between indirect tax revenue indicators and economic growth. There exist a long-run relationship between corporate governance and earnings quality, evidence from consumer goods firms .The OLS result shows that corporate governance indicators had a significant effect on earnings quality of consumer goods firms. It was found that board size, board gender diversity and audit committee independent are important determinants of corporate governance frameworks for shareholder and investor protection. Based on our findings, the study concluded that corporate governance has a great effect on the earnings quality of listed consumer goods firms. The study recommended that firms should encourage larger board members with independence, gender diversity and strong audit committee expertise and independence in order to promote effectiveness of the committee which, thus, increases the quality of financial reporting. Keywords: Corporate Governance, Earnings Quality, Board Size, Board Gender Diversity and Audit Committee Independence.