OWNERSHIP STRUCTURE AND EARNINGS MANAGEMENT PRACTICES OF NIGERIAN COMPANIES

The ownership of a business is a major factor in its survival and progress rate. It is assumed that the going concern nature of a business depends solely on its ownership structure which may also be determined by its size and capital base. Reviewing the financial reports of 137 sampled companies, this study examined the role of ownership structure on earnings management practices of Nigerian companies. Earnings management was measured using the magnitude of the discretionary accruals. The study tested the effect of ownership structure on earnings management. The OLS regression technique was used to measure the research model as well as the Pearson Moment Correlation Coefficient. The study shows that ownership structure has a significant relationship with earnings management practices in Nigeria. It further revealed that there is a positive significant relationship between management ownership and family ownership with earnings management. Also, there is a negative significant relationship between block ownership with earnings management practices in Nigeria. This study recommends that business regulators at all levels should monitor the ownership structure of companies operating in Nigeria.