BOARD INDEPENDENCE AND EARNINGS MANAGEMENT: MODERATING ROLE OF LEVERAGE IN NIGERIAN LISTED CONSUMER GOODS FIRMS

The purpose of this study is to examine the effect of board independence on earnings management and the moderating role of leverage in Nigerian-listed consumer goods firms. Utilizing a longitudinal research design, data from 12 purposively selected firms, spanning from 2013 to 2022, were analyzed using cross-sectional time-series feasible generalized least squares (FGLS) regression. The findings reveal that board independence significantly reduces earnings management (t = -2.31, p =.021), and leverage further strengthens this relationship (t = -3.57, p < .001). The results imply that enhancing board independence and managing leverage effectively are crucial for mitigating earnings management practices. This underscores the importance of robust corporate governance structures in ensuring financial reporting integrity in emerging markets. In conclusion, the study highlights the significant roles of board independence and leverage in curbing earnings management. The study recommends that firms should advocate for policies that mandate a higher proportion of independent directors and ensuring their active engagement in oversight responsibilities. Additionally, implementing regulatory frameworks to manage leverage effectively through prudent debt-to-total assets ratios and periodic reviews of financial strategies is advised. These measures aim to enhance corporate governance and foster transparency and accountability in financial reporting within Nigerian consumer goods firms.