Corporate Governance and Corporate Fraud: An Examination of Interaction Effects in Nigeria

Abstract

This research paper examined the relationship between corporate governance and the commission of corporate fraud among quoted companies in Nigeria. The research utilized a sample of eighteen (18) companies whose data were collected through content analyses on the basis of the availability of information from annual reports and other media reports. Data for the study were analyzed using a binary logit multiple regression analysis method. The findings of the study showed that there is a negative relationship between the independence of the board of directors and corporate fraud. The findings further show that there is a negative relationship between the commitment of the audit committee to their roles and corporate fraud. Finally, the findings show that there is a positive relationship between ownership structure and the phenomenon of corporate fraud in organizations. From the findings of the study, it is concluded that increasing the number of independent members in the board of directors will increase the ability of the board of directors to checkmate fraud commission. However, the ability of independence of board members to forestall corporate fraud is below the optimal level. It is also concluded that the commitment of the audit committee is an important deterrent of corporate fraud. Finally, increased concentration of ownership with only a few individuals will lead to increased fraud. Thus, it is recommended that the number of independent members in the board of directors be statutorily increased. Finally, it is recommended that the concentration of ownership in a few hands be discouraged.

The Effect of Ownership Structure and Whistleblowing System on Fraud Disclosure with Company Size as Moderating Variable

“…The results of this research are in line with the results of research from (Mardiana, 2015;Moses, 2019) which states that institutional/family ownership has a negative effect on the level of fraud in companies and contradicts the results of research from (Agarwal, 2015;Choi et al, 2020;Prasetyo, 2016) The Effect of Management Ownership on Fraud Disclosure The results of this research indicate that managerial ownership has no effect on fraud disclosure. This is due to the small share ownership by managers so that as minority shareholders, managers feel they will not enjoy the benefits of their hard work.…”

Can the Fraud Triangle Detect Financial Statement Fraud? (An Empirical Study of Manufacturing Companies in Indonesia)

“…Supervision carried out by an independent board is one aspect of good governance practice. The board of directors is an important mechanism in good governance because it has the highest authority in making decisions in the company [26].…”

Effect of Board Attributes on Earnings Management of Listed Deposit Money Banks in Nigeria

“…Despite the global adoption of various reporting standards, such as International Financial Reporting Standard (IFRS) and International Accounting Standards (IAS), yet unethical activities in the financial reporting are becoming order of the day and managers' discretion in financial reporting has continually threatened shareholders' interest. The persistent divergence of interest between managers and shareholders has been a recurring issue, and this has continually elicited empirical investigation in research (Moses, 2019).…”