Effect of Corporate Governance Mechanisms on Earnings Management: Evidence from Listed Nigerian Petroleum Marketing Companies

This study sought to ascertain the effect of corporate governance mechanisms on earnings management among listed Nigerian petroleum marketing companies. Specifically, it examines the influence of ownership concentration, board size, non-executive directors, gender diversity, and financial expertise on earnings management, with leverage and firm size as control variables. Using panel data from 2014–2023 for a sample of 7 petroleum marketing companies from 9 companies listed on the Nigerian Exchange Group (NGX), employing discretionary accruals as a measure with firm size and leverage as control variables, the results from fixed effects and robust regression models reveal that non-executive directors, gender diversity, and financial expertise significantly constrain earnings management than board size in the petroleum marketing companies, while ownership concentration exhibits a positive and significant impact. Consequently, the study concludes that female representation, financial expertise, non-executive directors as well as reasonable board size should be considered by companies if the purpose is to monitor restrain earnings management and increase reliability of financial statement. The study contributes to governance literature and offers practical insights for regulators, stakeholders, and policymakers in emerging markets.