EFFECT OF BOARD COMPOSITION AND OWNERSHIP CONCENTRATION ON EARNINGS QUALITY OF QUOTED CONSUMERS GOODS COMPANIES IN NIGERIA

Separation of control gives rise to managers’ right to control and use accounting estimates and techniques that can increase shareholders’ wealth. This has become more relevant in recent years as more firms are listed on the flow of Nigerian stock exchanges as public companies. The study examines the influence of board composition and ownership concentration on the quality of earnings of quoted consumer goods companies in Nigeria using a panel dataset of publicly listed companies over ten years. The study reveals that ownership concentration and board size of the explanatory variables are statistically and significantly influencing the explained variable, earnings quality at 1% and 5% level of significance, respectively. On the other hand, board independent directors and firm size have an insignificant impact on the earnings quality. It is, therefore, concluded that ownership concentration and board size are good variables that impact earnings quality. The study, therefore, recommends, among others, that the management of listed consumer goods companies in Nigeria should recognize board size and block holders when selecting the accounting method to be used, which will indicate the future performance of the company in the flow of earnings reporting.