EARNINGS MANAGEMENT AND CORPORATE GOVERNANCE IN NIGERIA BANKING SECTOR
        ABSTRACT
This study is motivated by a desire to examine IFRS Adoption: The Role of Network Effect and Legal System. In light of the empirical review and other discussions, a number of questions arose as to whether there is relationship between adoption of IFRS and network effects and there is relationship between adoption of IFRS and legal system of a country. Using the Ordinary Least Square (OLS) regression technique with the aid of computer software, the empirical findings revealed among other things that there is no significant relationship between adoption of IFRS and legal system of a country and that there is no significant relationship between adoption of IFRS and network effect of a country. Recommendations were however made by the researcher.
                    TABLE OF CONTENTS
    CHAPTER ONE: INTRODUCTION
Background of the Study                    
Statement of the Research Problem                 
Objectives of the Study                    
Research Hypothesis                         
Scope of the Study                     
Significance of the Study                     
Limitation of the Study                         
Organization of the Study                     
Operational Definitions of Terms                 
References                             
CHAPTER TWO: LIERATURE REVIEW
2.1    Concept of International Financial Reporting Standard (IFRS)    
2.2    IFRS Adoption                                
2.3    Benefits of Uniform Accounting Standards                
2.4    Factors Affecting the Adoption of IFRS            
Prediction Model for Adoption of IFRS            
Network Effects in Countries’ Adoption of IFRS            
References                                
CHAPTER THREE: RESEARCH METHODOLOGY
3.1    Introduction                             
3.2    The Research Design                         
3.3    Population and Sample of the Study             
3.4    Sampling Technique                        
3.5    Sources of Data                         
3.6    Measurement of Variables                     
3.7    Method of Data Analysis                 
3.8    Model Specification                     
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1    Introduction                            
4.2    Presentation and Analysis of Results                    
4.3    Test of Hypotheses                        
CHAPTER FIVE:    SUMMARY, FINDINGS, CONCLUSION AND RECOMMENDATION
5.1    Introduction                                 
5.2    Summary of Findings                         
5.3    Discussion                             
5.4    Conclusion                             
5.5    Recommendations                     
Bibliography                             
Appendix                            
CHAPTER ONE
INTRODUCTION
BACKGROUND TO THE STUDY
 The issues of both corporate governance and earnings management have been receiving a tremendous concern from government, accounting professional bodies auditing as well as the public, particularly after the latest high-profile corporate collapses. The integrity of financial reporting system was being questioned due to the failure of the board to oversight its implementation (Alzoubi, and Selamat, 2012).
The primary objective of financial statements is to provide users with information relating to the uncertainty and timing of future cash flows. Relevance of accounting numbers creates powerful incentives for managers to manipulate earnings to their advantages.
Abed, Al-Attar, and Suwaidan, M. (2012) stated two competing reasons for managers to manipulate their income. The first is the capital market pressure which states that the widespread use of accounting information by investors and financial analysts for stock valuation creates incentives for executives to manage earnings in order to influence short-term stock performance. The second reason is contracting motivation which stresses the use of accounting data to monitor and regulate contracts between firms and their stakeholders. Managers can manipulate earnings in order to maximize their income or to signal their private information, thus influencing the informativeness of earnings.
According to Juo-Lien, Her-Jiun and Huimin (2011), high-profile failures in the US corporate financial reporting have raised concerns regarding the integrity of public financial information, prompting the introduction of the Sarbanes-Oxley Act (the SOX Act) of 2002 as a direct result of the erosion of investor confidence. These corporate scandals have demonstrated that aggressive earnings management, indicated by lower quality accounting information, is accompanied by serious shareholder losses. Consequently, earnings management can provide an important signal showing that, in pursuing private benefits, managers are sacrificing shareholder wealth.
The SOX Act was designed to reform corporate governance, increase the accuracy and reliability of corporate disclosure and reduce the likelihood of misstatements in financial reporting. For example, to reinforce the responsibilities of Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs), the SEC adopted Section 302 of the SOX Act, which mandates that CEOs and CFOs of companies reporting to the SEC should provide personal certifications in each of their quarterly and annual reports. These certifications should affirm that the signing officer has reviewed the report, and it is fair and free of material misstatements. The SOX Act thus is expected to alter managerial behavior in accounting transparency and earnings management (Juo-Lien, Her-Jiun, and Huimin (2011).
More so, few studies have been conducted so far on the Nigerian business environment; hence the study intends to reduce the knowledge gap.
STATEMENT OF RESEARCH PROBLEM
By the evolution of today’s modern business many of the corporations have become owned and controlled by families and the major agency problem exists not only between the management and owners in general, but between the management (the controlling family) and minority shareholders as well. Due to the increase in this conflict the issue of trust has taken the key position in today’s financial analysis procedures. Because management is accountable to shareholders and with in the business other stakeholders are also present and each stakeholder has his own interest in the business so, each one who is having any where any authority try to convert the results of that authority into his own favor. Earnings management is one of the examples which accountants by the will of authorities smoothen their earnings. Here a need has been assessed in the result of which concept of appropriate corporate governance emerged.
It is against this backdrop, the researcher intends to carry out this study to investigate the relationship between earnings management and corporate governance; hence the following research questions are raised.
Does board size have significant impact on earnings management?
Is there relationship between board composition and earnings?
Does number of audit of committee meetings have significant impact on earnings management?
OBJECTIVES OF THE STUDY
The objective of this study is to investigate the impact of earnings management and corporate governance. The specify objectives are:
To find out if board size have significant impact on earnings management.
To ascertain the relationship between board composition and earnings.
To determine whether number of audit of committee meetings have significant impact on earnings management.
  RESEARCH HYPOTHESIS
The hypotheses that would be tested in the course of the work are:
Board size has significant impact on earnings management.
There is relationship between board composition and earnings.
Number of audit of committee meetings has significant impact on earnings management?
SCOPE OF STUDY
This research work is an empirical study on earnings management and corporate governance. The population of the study is entire banks quoted in the Nigeria Stock Exchange, while the sample is selected banks operating in Benin City, Edo State.
The length of period covered by the study was three years (2007 – 2011).
SIGNIFICANCE OF THE STUDY
The banking industry in Nigeria will find the research findings or report useful in decisions making.
Investors and other interested parties such as shareholders and business oriented individuals will find the research finding useful for investment decisions.
Society: which is made up of individual and organizations will finds the research findings useful for investment decisions.
Government: authorities and agencies will find the research findings useful in the areas of making tax policy and investment decisions into corporate organizations.
Analysts and future researchers such as professional accountants, auditors and academicians will find the research findings useful for analyzing the role of corporate governance on earnings management through financial reporting and the future research by academicians.
Data bank future studies: the research findings or literature will serve as a research topic for future studies by academicians and researchers.
LIMITATIONS OF THE STUDY
The limitations of this study include the fact that it deals only with Benin City, the results of which one cannot easily generalize for the country. Secondary data were the main instruments used to gather information with its attendant problems.
Time and funds were the constraints to covering a wider area of undertaking a more detailed analysis of the subject matter.
REFERENCES
Alzoubi, E. S. S., and Selamat, M. H. (2012), The Effectiveness of Corporate Governance Mechanisms on Constraining Earning Management: Literature Review and Proposed Framework, International Journal of Global Business, 5 (1), 17-35.
Abed, S., Al-Attar, A., and Suwaidan, M. (2012), Corporate Governance and Earnings Management: Jordanian Evidence, International Business Research, 5(1):216-225
Juo-Lien, W., Her-Jiun S., Huimin C., (2011),  Corporate governance reform and earnings management, Investment Management and Financial Innovations, 8(4): 109 – 118