OWNERSHIP STRUCTURE AND EARNINGS QUALITY OF LISTED FIRMS IN NIGERIA

ABSTRACT

This study delves into a comprehensive analysis of the intricate interplay and multifaceted dynamics that exist between ownership structure and earnings quality within the context of listed firms in Nigeria. In order to achieve this goal, the study conducts a thorough examination of the various dimensions of ownership within the listed nonfinancial firms in Nigeria. This entails a meticulous dissection of ownership categories into managerial ownership, institutional ownership, ownership concentration and foreign ownership. Secondary data was extracted from the annual reports and accounts of fifteen sampled firms listed in the non-financial sector of the Nigerian Exchange Group for a period of eight years (2014 – 2021). The study found that: managerial ownership and ownership concentration have a significant positive relationship with earnings quality; foreign ownership had a marginally significant negative relationship with the dependent variable; while institutional ownership showed no significant relationship with earnings quality. Based on the findings, the study highlights the complexity of the relationship between ownership structure and earnings quality. While some findings align with expectations, such as the positive association between managerial ownership, ownership concentration, firm size with earnings quality, other relationships are context-dependent and subject to various factors, including market, industry, and regulatory conditions. The results can be useful for investors and analysts when evaluating the quality of a firm's financial reporting.