1.1 BACKGROUND OF THE STUDY
The issue of corporate governance has generated great public interest in recent times. This is due to the fact that there has been great financial scandal involving notable firms and Banks globally and the economic and financial implication it has on the overall interest and well-being of the companies and the society at large. (Solabomi & Uwuigbe, 2013; Uwuigbe, Daramola, & Anjolaoluwa, 2014). According to the World Bank report (2002), corporate governance is viewed as “the set of rules that influence expectations about the use of control over resources of a firm”. A definition given by Sloan (2002) stated that the financial report of the firm constitutes the first source of true and independent financial in-formation about the firm’s performance; this as a result makes financial reporting a significant issue to man-agers as well as the rest key stakeholders. The fundamental aim of corporate governance is to ensure that shareholders, managers and other key stakeholders in an organization discharge their responsibilities within the framework of transparency, accountability, and ethics. According to Kachouri, Ben Saad, and Jarboui (2015), the board of directors constitute the center and authority of control of any firm. Prior studies (Singh, Mathur, & Gleason, 2004; Yermack, 1996) have come to the conclusion that the structure of the board of directors have an influence on the timely financial reports and earning quality of the firm. The study seeks to proffer an appraisal of corporate governance and earning quality of listed manufacturing companies.
1.2 STATEMENT OF THE PROBLEM
The emergence of the concept of corporate governance came as a result of the challenges faced by corporate organization regarding the mismanagement of fund and fraud which led to the collapse of many large and notable organizations globally. It identifies the fact that Management (agent) in the exercise of their managerial functions and reporting financial information to the shareholders (owners) and other stakeholders may give misleading information to suit their selfish gains. The issue of corporate governance came as a result of the activities of managers or agents in sharp practices, which are against the interest of the shareholders. This circumstances leads to conflict of interest between shareholders and directors. This conflict of interest is the fundamental issue which the principle of corporate governance seeks to address. Hence firms should seek to formulate and implement policies which promote the principle of corporate governance. The problem confronting the study is to proffer an appraisal of corporate governance and earning quality of listed manufacturing companies.
1.3 OBJECTIVES OF THE STUDY
The Main Objective of the study is to proffer an appraisal of corporate governance and earning quality of listed manufacturing companies; The specific objectives include:
1 To determine the nature and purpose of corporate governance.
2 To appraise the relevance of earnings quality.
3 To investigate the effect of corporate governance on earning quality of listed manufacturing companies.
1.4 RESEARCH QUESTIONS
1 What is the nature and purpose of corporate governance?
2 What is the relevance of earnings quality?
3 What is the effect of corporate governance on earning quality of listed manufacturing companies?
1.5 STATEMENT OF THE HYPOTHESIS
The statement of the hypothesis for the study is stated in Null as follows
HO The level of corporate governance on listed manufacturing companies is low.
HO The level of earnings quality in listed companies is low.
HO The effect of corporate governance on earning quality of listed manufacturing companies is high.
1.6 SIGNIFICANCE OF THE STUDY
The study seeks to promote the practice of corporate governance as a panacea for accountability and transparency in the management of corporate firms. It shall also serve as a source of information to managers and other stakeholders in the economy.
1.7 SCOPE OF THE STUDY
The study focuses on the appraisal of corporate governance and earning quality of listed manufacturing companies.
1.8 LIMITATION OF THE STUIDY
The study was confronted with logistics and geographical factors
1.9 DEFINITION OF TERMS
CORPORATE GOVERNANCE DEFINED
Corporate governance is viewed as “the set of rules that influence expectations about the use of control over resources of a firm.