Audit committee influence on how board structure impacts earnings management practices in Nigeria

This study examines the moderating influence of audit committee attributes on the relationship between board structure and earnings management (EM) practices among listed firms in Nigeria. Drawing on agency theory, stewardship theory, and resource dependence theory, the paper investigates how audit committee independence, meeting frequency, financial expertise, and size interact with board characteristics — namely board size, board independence, board diversity, and CEO duality — to shape the magnitude of discretionary accruals as a proxy for EM. Using a balanced panel dataset of 151 non-financial and financial firms listed on the Nigerian Exchange Group (NGX) over the period 2010–2024 (2,265 firm-year observations), the study employs fixed-effects and random-effects panel regression models, with selection guided by the Hausman specification test. Results reveal that audit committee independence (ACI), financial expertise (ACEX), meeting frequency (ACME), and audit committee size (ACSIZE) each significantly reduce earnings management, consistent with a priori expectations. Board independence (BIND) and board diversity (BDIV) also exert statistically significant negative effects on EM, while CEO duality (DUAL) aggravates EM. Critically, the interaction terms confirm that audit committee attributes substantially amplify the constraining effect of board independence on EM. These findings contribute novel empirical evidence to the corporate governance–earnings quality nexus in Sub-Saharan Africa, with implications for regulatory reform, institutional investors, and the Financial Reporting Council of Nigeria. The study is among the first to explicitly model the audit committee as a moderator in the board–EM relationship within the Nigerian institutional context.