The Effect of Corporate Governance Practices on Earnings Management of Companies Listed at the Nairobi Securities Exchange

Citation:
M.Mwangi, C.Iraya, G.W.MUCHOKI. "The Effect of Corporate Governance Practices on Earnings Management of Companies Listed at the Nairobi Securities Exchange." European Scientific Journal. 2015;11(1):169-178.

Abstract:

The objective of the study was to establish the effect of corporategovernance practices on earnings management of companies listed at theNairobi Security Exchange (NSE). The target population consisted of the 49companies that had been continuously and actively trading at the NSEbetween January 2010 and December 2012. Secondary data was usedcovering the period 2010 to 2012 and analyzed using linear regression to testthe effect of the independent variables on the dependent variable. The studyfound that earnings management is negatively related to ownershipconcentration, board size and board independence but positively related toboard activity and CEO duality. The study recommended the need foreffective corporate governance practices in listed companies in Kenya tocontribute to reduced earnings management and avert possible collapse oflisted companies in Kenya.

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