MONITORING CHARACTERISTICS AND EARNINGS QUALITY OF LISTED BUILDING MATERIALS FIRMS IN NIGERIA

The existing literature provides mix of results on the relationships between governance mechanisms and earnings quality. Hence, the nature of their relationships remains to be controversial. This paper is aimed at investigating the relationship between board characteristics and earnings quality of listed Building Materials Firms in Nigeria for the period of 2005 to 2012.The data was obtained from the sample of seven firms out of the population of 13 firms through their annual report and accounts. The independent variable Board characteristic was proxied by the board size, board composition, managerial shareholding and institutional shareholding, while the residuals from the modified Dechow and Dichev (2002) was used to proxy earnings quality. The study adopts multiple regression in analyzing the data with the aid of SPSS. The findings reveal that managerial shareholding have a negative significant impact on earnings quality, while the other independent variables were found to be not significantly impacting on the earnings quality of Nigerian Building Materials Firms. It is recommended that Nigerian Building Materials Firms should have more percentages of its shares to be owned by the management in order to improve their financial reporting quality.