BOARD GENDER DIVERSITY, AUDIT COMMITTEE EFFECTIVENESS, BANK SIZE AND THE CREATIVE ACCOUNTING–FINANCIAL DISTRESS NEXUS IN NIGERIAN LISTED DEPOSIT MONEY BANKS

This study examines three related dimensions of the corporate governance–creative accounting–financial
distress nexus among Nigerian listed deposit money banks: the effect of board gender diversity on
creative accounting practices, the mediating role of creative accounting practices in the relationship
between audit committee effectiveness and financial distress, and the moderating role of bank size in the
relationship between creative accounting practices and financial distress. Anchored on Agency Theory,
complemented by Stakeholder Theory and Signalling Theory, the study adopted an ex post facto design
and positivist philosophy, drawing on secondary panel data from eleven purposively sampled banks listed
on the Nigerian Exchange Group over 2015–2024 (110 bank-year observations). Board gender diversity
was measured as the proportion of female directors on the board; audit committee effectiveness as the
frequency of audit committee meetings; creative accounting practices as discretionary loan loss
provisions (DLLP); bank size as the natural logarithm of total assets; and financial distress as the Ohlson
O-Score. Following the Hausman test, fixed-effects panel regressions with cluster-robust standard errors
were estimated, complemented by a stepwise mediation procedure and an interaction-term moderation
model. The results showed that board gender diversity had no statistically significant effect on creative
accounting practices (β = 0.0023, p = 0.897); that audit committee effectiveness had no significant direct
effect on financial distress or on creative accounting practices, and that creative accounting practices did
not mediate the relationship between audit committee effectiveness and financial distress; and that the
interaction between creative accounting practices and bank size was statistically insignificant (β = -
0.0196, p = 0.781), indicating that bank size does not moderate the creative accounting–distress
relationship. Leverage and bank size remained significant direct predictors of distress throughout. The
study concludes that demographic board diversity, meeting-frequency-based audit committee measures,
and firm size do not, on their own, meaningfully condition the accounting-discretion–distress pathway in
the Nigerian banking sector, implying that governance effectiveness depends on substantive rather than
structural attributes. The study recommends that banks pair gender-diversity initiatives with the
deliberate appointment of financially literate female directors to key oversight committees, that audit
committee effectiveness be evaluated using qualitative rather than purely frequency-based indicators, and
that supervisory strategies be applied on a risk-sensitive rather than a size-based basis.