EFFECT OF OWNERSHIP STRUCTURE ON EARNINGS QUALITY OF LISTED INSURANCE COMPANIES IN NIGERIA.

Abstract

The Earnings figure is one of the most important economic variables in the financial statement that measures the financial position and performance of an entity. However the earnings reported may not really reflect the true performance of a company due to management manipulation as a result measures are raised to curb this situation among which is ownership structure (distribution of company ownership among its shareholders). The main objective of this study is to determine the effect of ownership structure on earnings quality of listed insurance companies in Nigeria. The study formulates three hypotheses and applied Generalised Least Squared (GLS) Techniques to analyse the relationship between dependent variable earnings quality and the independent variable, institutional ownership, managerial ownership and ownership concentration of the sampled Insurance Companies. Data were extracted from the annual reports and accounts of the Insurance Companies over the period 2012 to 2021. The data analysis technique was regression using STATA version 14. The study found that: Institutional ownership negatively influences earnings quality, Managerial ownership negatively influences earnings quality and ownership concentration negatively impacts on earnings quality but not significant. The study recommends that Nigerian Insurance companies should reduce the shareholding of their managers, motivates their institutional investors to become long term institutional investors and reduces the shareholding of their major investors.