Risk Management Committee and Real Earnings Management through Sales: Evidence from Nigeria

Armaya’u Alhaji Sani; Rohaida Abdul Latif; Redhwan Ahmed Al-dhamari

Risk Management Committee and Real Earnings Management through Sales: Evidence from Nigeria

Authors

Armaya’u Alhaji Sani Centre for Entrepreneurship Development, Federal University Dutse (FUD), 7156, Jigawa State, Nigeria
Rohaida Abdul Latif Tunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia
Redhwan Ahmed Al-dhamari Tunku Puteri Intan Safinaz School of Accountancy (TISSA-UUM), Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia

Keywords:

real earnings management, independence directors, abnormal production cost, risk management committee

Abstract

This study examines the impact of risk management committee on real earnings
management through sales manipulation of listed companies in Nigeria. The analysis
is based on a sample of 80 listed non-financial firms for the period of five years (2012-
2016), making up 400 firm-year observation. The data was extracted from the annual
report of the sample firms and Thompson Reuters database. Panel corrected standard
error regression (PCSE) was employed. The results show that risk management
committee (RMC) and independence directors reduce the management desire to
manipulate the reported earnings. The study informs the regulators on the needs for
firms to set up an independent RMC to restrain management from manipulating the
real earnings activities through sales.

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Published

2020-10-24

How to Cite

Alhaji Sani, A., Abdul Latif, R., & Ahmed Al-dhamari, R. (2020). Risk Management Committee and Real Earnings Management through Sales: Evidence from Nigeria. Journal of Advanced Research in Business and Management Studies, 12(1), 62–69. Retrieved from https://akademiabaru.com/submit/index.php/arbms/article/view/1303