ABU Geraldine
&
OLUFEMI Oghogho Gina (PhD)
Department of Accounting and Finance,
College of Social and Management Sciences,
Wellspring University Benin City, Edo State.
abugeraldine@gmail.com || gina.olufemi@wellspringuniversity.edu.ng
Abstract
This study examines the influence of top management characteristics and firm-specific factors on fraud ratings in Nigeria‘s listed service companies. Using panel data from 22 firms over the period 2013–2023, fraud risk is measured using the Beneish M-Score, while independent variables include top management ownership, gender diversity, span of control, firm size, and leverage. Employing panel regression models, the findings reveal that leverage significantly reduces fraud risk, emphasizing the role of external monitoring in corporate governance. However, top management ownership, gender diversity, span of control, and firm size do not exhibit statistically significant effects on fraud ratings. These results suggest that while corporate governance mechanisms are critical, their effectiveness may vary depending on regulatory environments and industry contexts. The study contributes to the literature by integrating fraud detection measures with governance attributes, highlighting the role of leverage in financial risk mitigation. It offers theoretical contributions to agency and upper echelons theories while providing practical implications for regulators, investors, and policymakers. Strengthening governance frameworks, enhancing diversity policies, and maintaining optimal capital structures are recommended strategies for reducing fraud risk. Future research should explore these relationships across broader samples and different economic sectors to validate these findings.
Keywords: Beneish M-Score, Corporate Governance, Fraud Ratings, leverage, Top Management Characteristics.
