The Effect of Board the Size and Audit Committee the Size on Earnings Management in Nigerian Consumer Industries Companies

Board and audit committee the size are important governance mechanisms that affect companies’ reported earnings due to the managers’ effort to manipulate the earnings in order to meet their predetermined target. The objective of this study is to examine the relationship between board the size, the audit committee the size and earnings management in Nigerian consumer industries companies. A total of 29 companies in the consumer sector of the Nigerian stock exchange were analyzed using multiple linear regressions. Data was obtained from secondary sources alone using annual report and account of the companies for the periods of 2010 to 2013. The results show that audit committee the size is negatively and significantly affects earnings management, the result further suggests that larger board is not efficient to minimize the tendency of managing earnings, therefore it is recommended that the audit committee should be increased to minimize the likelihood of earnings management.