EFFECT OF BOARD DIVERSITY ON EARNINGS MANAGEMENT IN FIRMS LISTED ON THE NAIROBI STOCK EXCHANGE
Abstract
Purpose of the Study: This study aims to assess the effects of technological advancement on crime scene processing, crime detection, and crime prevention in Kisumu East Sub-County, Kenya.
Statement of the Problem: The term "crime management" encompasses both actions and outcomes related to addressing crime in various settings. This study specifically examines the implications of technological advancements in crime management within Kisumu East Sub-County, Kenya.
Methodology: The study adopted a descriptive research design and collected data from 300 respondents within Kisumu East Sub-County, using a sample size of 169. Data were gathered through self-administered questionnaires, with consent obtained to adhere to ethical standards. SPSS 24 software facilitated the analysis, employing both descriptive and inferential statistics.
Findings: The findings reveal a significant relationship between crime detection and crime prevention, with crime detection showing a strong positive association (F=78.548, p-value=0.000). Crime scene processing also positively contributed, albeit to a lesser extent (Beta = .127).
Conclusion: The study concludes that technological applications significantly impact crime prevention, detection, and crime scene processing in Kisumu East Sub-County, Kenya. It highlights the critical role of technology integration into law enforcement practices.
Recommendations: The study recommends that law enforcement agencies in Kisumu East Sub-County prioritize the integration of technological solutions to enhance crime prevention efforts. It also advocates for the establishment of clear regulations and guidelines to govern the ethical use of technology in crime detection.
Key Words: Board Characteristics, Board Diversity, Earnings Management, Listed Firms, Nairobi Securities Exchange
References
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Saona, P., Muro, L., & San Martín, P. (2018). Board of Director Gender Diversity and Its Impact on Earnings Management: An Empirical Analysis for Selected European Firms
Suyono, E., & Al Farooque, O. (2018). Do governance mechanisms deter earnings management and promote corporate social responsibility? Accounting Research Journal, 31(3), 479– 495.
Vermeir, I., & Van Kenhove, P. (2018). Gender differences in double standards. Journal of Business Ethics, 81(2), 281–295.
Were, O. (2018). Effect of corporate governance on earnings management in firms listed at the Nairobi Securities Exchange. (Unpublished thesis), University of Nairobi, Nairobi.
Wijesinghe, K.D.G.N.., Bandara, R.M.S., Dassanayake, W., & Undugoda, M.C. (2019). The impact of corporate governance on firm value: Evidence from listed manufacturing companies in Sri Lanka. University of Kelaniya, Sri Lanka.
Wu, D., & Li, L. (2020). Does board size matter for earnings quality? Evidence from China. China Journal of Accounting Research, 13(2), 153–172.
Yahya, F., Abbas, G., Ahmed, A., & Hashmi, M. S. (2020). Restrictive and supportive mechanisms for female directors’ risk-averse behavior. Evidence From South Asian Health Care Industry. SAGE Open, 10(4), 1–15.
Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter? International Review of Financial Analysis, 55, 170–183
Abu, S. O., Okpeh, A. J., & Okpe, U. J. (2016). Board characteristics and earnings management of deposit money banks in Nigeria. International Journal of Business and Social Science, 7(9), 159–173.
Arioglu, E. (2020). The affiliations and characteristics of female directors and earnings management: Evidence from Turkey. Managerial Auditing Journal, 35(7), 927–953
Arun, T. G., Almahrog, Y. E., & Aribi, Z. A. (2015). Female directors and earnings management: Evidence from UK companies. International Review of Financial Analysis, 39, 137–146.
Asogwa, C. I., Ofoegbu, G. N., Nnam, J. I., & Chukwunwike, O. D. (2019). Effect of corporate governance board leadership models and attributes on earnings quality of quoted Nigerian companies. Cogent Business & Management.
Assenga, M. P., Aly, D., & Hussainey, K. (2018). The impact of board characteristics on the earnings management of Tanzanian firms. Corporate Governance: The International Journal of Business in Society, 18(6), 1089–1106
Barber, B. M., & Odean, T. (2017). Boys will be boys: Gender, overconfidence, and common stock investment. The Quarterly Journal of Economics, 116(1), 261–292
Bhat, K.U., Chen, Y., Jebran, K., & Bhutto, N.A. (2018). Corporate governance and firm value: A comparative analysis of state and non-state-owned companies in the context of Pakistan. Corporate Governance: The International Journal of Business in Society.
Chatterjee, C. (2019). Board Quality and Earnings Management: Evidence from India. Global Business Review.
Chen, J., Leung, W. S., Song, W., & Goergen, M. (2019). Why female board representation matters: The role of female directors in reducing male CEO overconfidence. Journal of Empirical Finance, 53, 70–90.
Debnath, N. C. (2019). Corporate Governance And Real Earnings Management : Evidence From An Emerging Economy.
Doan, T., & Iskandar-Datta, M. (2020). Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy. Journal of Empirical Finance, 55(C), 161–176.
Feng, Y., Hassan, A., & Elamer, A. A. (2020). Corporate governance, ownership structure and capital structure: evidence from Chinese real estate listed companies. International Journal of Accounting & Information Management.
Freitas, C.R.M. (2018). Gender diversity in the board of directors and its impact on firm value and corporate governance: European evidence. Largo do Paço Braga: Universidade do Minho.
Garg, M.C., & Tanwer, K. (2020). Impact of board characteristics and capital structure on firm value: A literature review. Journal of Emerging Technologies and Innovative Research, 7(11).
Hassan, R., & Marimuthu, M. (2020). Corporate governance, board diversity, and firm value: Examining large companies using panel data approach. Economics Bulletin, 36(3)
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. the Journal of Finance, 48(3), 831–880
Jensen, M.C., & Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305-360.
Kao, L., & Chen, A. (2014). The effects of board characteristics on earnings management. Corporate Ownership & Control, 1(3), 96–107.
Kothari, C. (2014). Research methodology: Methods and techniques (3rd Ed.). New Delhi: New Age International Publishers Ltd.
Kyaw, K., Olugbode, M., & Petracci, B. (2017). Does gender diverse board mean less earnings management?. Finance Research Letters, 14, 135-141.
Lakhal, F., Aguir, A., Lakhal, N., & Malek, A. (2017). Do women on boards and in top management reduce earnings management? Evidence in France. Journal of Applied Business Research, 31(3), 1107
Letting, N., Aosa, E., & Machuki, V. (2017). Board Diversity and Performance of Companies Listed in Nairobi Stock Exchange. International Journal of Humanities and Social Science, 2(11), 172-182.
Liu, Q., & Lu, Z. J. (2017). Corporate governance and earnings management in the Chinese listed companies: A tunneling perspective. Journal of Corporate Finance, 13(5), 881- 906.
Liu, Y., Miletkov, M. K., Wei, Z., & Yang, T. (2015). Board independence and firm performance in China. Journal of Corporate Finance, 30, 223–244.
Mugenda, O., & Mugenda, A. (2013). Research methods: Qualitative and quantitative approaches. Nairobi: ACTS Press.
Ngatno, A. E., & Youlianto, A. (2021). Moderating effects of corporate governance mechanism on the relation between capital structure and firm performance. Cogent Business & Management, 8(1), 1866822.
Nyatichi, V., Iraya, C., Mwangi, M., & Njihia, J. (2020). Corporate Governance And Earnings Management Of Companies Listed At Nairobi Securities Exchange. African Development Finance Journal, 4(2), 79-95.
Patel, S. J. (2022). Board characteristics and firm value of listed non-financial firms at the Nairobi Securities Exchange, Kenya. Unpublished master’s dissertation. Kenyatta university
Pududu, M. L., & De Villiers, C. (2016). Earnings management through loss avoidance: Does South Africa have a good story to tell?. South African Journal of Economic and Management Sciences, 19(1), 18.
Salem, W.F., Metawe, S.A., Youssef, A.A., & Mohamed, M.B. (2019). Boards of directors’ characteristics and firm value: A comparative study between Egypt and USA. Open Access Library Journal, 6(e5323).
Saona, P., Muro, L., & San Martín, P. (2018). Board of Director Gender Diversity and Its Impact on Earnings Management: An Empirical Analysis for Selected European Firms
Suyono, E., & Al Farooque, O. (2018). Do governance mechanisms deter earnings management and promote corporate social responsibility? Accounting Research Journal, 31(3), 479– 495.
Vermeir, I., & Van Kenhove, P. (2018). Gender differences in double standards. Journal of Business Ethics, 81(2), 281–295.
Were, O. (2018). Effect of corporate governance on earnings management in firms listed at the Nairobi Securities Exchange. (Unpublished thesis), University of Nairobi, Nairobi.
Wijesinghe, K.D.G.N.., Bandara, R.M.S., Dassanayake, W., & Undugoda, M.C. (2019). The impact of corporate governance on firm value: Evidence from listed manufacturing companies in Sri Lanka. University of Kelaniya, Sri Lanka.
Wu, D., & Li, L. (2020). Does board size matter for earnings quality? Evidence from China. China Journal of Accounting Research, 13(2), 153–172.
Yahya, F., Abbas, G., Ahmed, A., & Hashmi, M. S. (2020). Restrictive and supportive mechanisms for female directors’ risk-averse behavior. Evidence From South Asian Health Care Industry. SAGE Open, 10(4), 1–15.
Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter? International Review of Financial Analysis, 55, 170–183
Published
2024-07-05
How to Cite
Kiptarus , C., & Sangoro, O. (2024). EFFECT OF BOARD DIVERSITY ON EARNINGS MANAGEMENT IN FIRMS LISTED ON THE NAIROBI STOCK EXCHANGE. African Journal of Emerging Issues, 6(12), 38-52. Retrieved from https://ajoeijournals.org/sys/index.php/ajoei/article/view/646
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