Ownership Concentration and Earnings Restatement of Listed Industrial Goods Manufacturing Companies in Nigeria
Vol. 5 Issue 2
This study is undertaken to examine the relationship between corporate ownership concentration and earnings restatement of listed industrial-goods manufacturing firms in Nigeria, using firm size as a moderator. Based on convenience sampling, a panel data from ten industrial goods manufacturing companies that are listed on the Nigerian Stock Exchange were collected from 2012 to 2018. Inferential analyses were done using logit regression techniques, based on 5% level of significance. Firm size was used as the contextual factor. On the final analysis, it was found that ownership concentration was negatively and significantly associated with both income-increasing and income-decreasing earnings restatements and firm size was able to significantly moderate only the relationship between income-decreasing earnings restatement and ownership concentration. Therefore, based on the results obtained, we concluded that block shareholding is a strategic deterrence mechanism against earnings restatements. We therefore recommended that the Securities and Exchange Commission of Nigeria should evolve institutionalization of block shareholdings and shareholders’ activism, to be championed by block shareholders to enhance their monitoring role. Also, regulatory bodies should pay close attention to small firms’ high propensity to restate earnings.
