DOI: 10.36347/sjebm.2015.v02i03.006

Pages: 256-264

This study examined corporate governance and earnings management practices in Nigeria. Descriptive survey was adopted. Primary data was used for the study through structured questionnaire and was tested with Z-test statistical tool. The findings of this study revealed that there was a negative relation between outside directors and earnings management as corporate boards dominated by outside directors makes manipulative accounting difficult, constrain the fraud tendencies of manager and reduces the likelihood of earnings management while boards that are dominated by inside directors increase transfer of wealth to managers at the expense of the stakeholders and increase the tendencies of fraudulent reporting. Based on the study findings it is recommended that the audit committee members should be encouraged to possess a certain level of financial competencies in order to decrease the likelihood of earnings management and; that corporate organizations should provide formal orientation programs for their new and existing directors and support the development of external courses on issues of corporate governance and earnings management.