Ceo characteristics, corporate attributes, and earnings quality of Nigerian listed firms: Corporate age diversity as moderating role

Earnings quality has become a major concern for shareholders, regulatory agencies and academia. Thereby, the effect of earnings manipulations has a direct consequence on the growth and future value of the corporate organizations, especially in the manufacturing industries. Hence, earnings quality needs an effective monitoring by the board and CEOs as suggested by agency theory. Although, the findings from developed countries confirmed the proposition but may not sustain the prediction of agency theory in the emerging economy like Africa. Therefore, this study examines the influence of CEO attributes on earnings quality in the Nigerian manufacturing companies. In addition, the study examines the moderating effect of corporate age on the relationship between CEO attributes and earnings quality. Based on the data of 304 firm-years of manufacturing companies listed on the Nigerian Stock Exchange, the study shows significant effect of CEO attributes on earnings quality. Specifically, the findings revealed that CEO nationality, CEO financial expertise, and corporate age significantly improve the magnitude of earnings quality. This study also shows that the interaction of corporate age on the influence of CEO financial expertise and CEO nationality on earnings quality. This study contributes to the agency theory as well as resource dependency theory. It also suggests the need for regulator to strengthen the monitoring mechanisms process in reducing the earnings management in order to improve the earning quality.