Investigating Tunneling from Nigerian non-finance Listed Companies

The study investigates directors tunnelling in Nigeria drawing samples from listed non-finance firms on the floor of the Nigerian Exchange Group market. While directors tunnelling proxied by directors’ remuneration is the dependent variable, the independent variables adopted for this study includes ownership concentration, big4 auditors, capital structure and cash holding. Furthermore, in line with related extant literature, we employed the variable of firm size to control our model. Data set employed in this study spans through the periods between 2011 and 2020. In the light of this, the empirical result of this study leads to the conclusion that out of the four independent variables adopted in this study, only big4 auditors and capital structure significantly affect directors tunnelling. Specifically, we conclude that when a big4 firm audit the accounts of the firms in our sample, directors tunnelling declines. Similarly, we conclude that the more a firm finances their operations through debt, directors tunnelling declines. Succinctly, we recommend that firms should strive towards debt financing while also seeking to employ the services of big4 auditors to keep at bay tunnelling among listed non-finance firms.