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Assessment of the Effects of Firms Characteristics on Earnings Management of Listed Firms in Nigeria

Author

Listed:
  • Uwalomwa Uwuigbe
  • Uwuigbe Olubukunola Ranti
  • Okorie Bernard

Abstract

This study assessed the effects of firms’ characteristics on earnings management of listed companies in Nigeria. To achieve the objectives of this study, a total of 20 listed firms in the Nigerian stock exchange market were selected and analyzed for the study using the judgmental sampling technique. The corporate annual reports for the period 2006-2010 were used for the study. In testing the research hypothesis, the study adopted the use of both descriptive statistics and econometric analysis using the pooled ordinary least square regression for the listed sampled firms. Findings from the study revealed that while firm size and firms’ corporate strategy have a significant positive impact on earnings management (proxied by discretionary accruals); on the other hand, the relationship between firms’ financial leverage and discretionary accruals of the sampled firms in Nigeria was not significant. Thus, the study concludes that large firms tend to have higher motivations and more prospects to engage in the manipulation earnings and exaggerate earnings due to the intricacy of their operations and the complexity for users to identify overstatement.

Suggested Citation

  • Uwalomwa Uwuigbe & Uwuigbe Olubukunola Ranti & Okorie Bernard, 2015. "Assessment of the Effects of Firms Characteristics on Earnings Management of Listed Firms in Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(2), pages 218-228.
    • Handle: RePEc:asi:aeafrj:v:5:y:2015:i:2:p:218-228:id:1333
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    Citations

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    Cited by:

    1. Dhouha Bouaziz, 2024. "Does the CEO’s Entrenchment Affect the Financial Communication Quality? Empirical Evidence from France," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 23(1), pages 107-133, January.
    2. Kehinde Adesina & Uwalomwa Uwuigbe & Olubukola Ranti Uwuigbe & Osariemen Asiriuwa & Sylvester Oriabe, 2017. "Dividend Policy and Share Price Valuation in Nigerian Banks," EuroEconomica, Danubius University of Galati, issue 1(36), pages 185-195, May.
    3. Oyefemi Olympus OWORU & Jayeola OLABISI & Olagunju ADEBAYO & Efetobore OKORODUDU, 2020. "Does Earnings Management Practice Affect The Performance Of Listed Consumer Goods Firms In Nigeria?," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(1), pages 94-103.
    4. Juhendra Debbarma & Chinmoy Roy, 2023. "Effects of Corporate Governance on Creative Accounting Practices: Evidence from NSE-listed Companies in India," Indian Journal of Corporate Governance, , vol. 16(1), pages 52-78, June.

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