Firm-Specificattributes And Earnings Management: Does Size Really Matteras A Moderating Variable Innigerian Banks?

Financial reports help to bring to the public domain the performance of companies for a given period. Quality financial reports are needed by the various user groups for informed decisions to be made. However, due to asymmetry information between owners and management, there is possibility of corporate management involvement in manipulation of organisations’ earnings. This eventually casts doubt in the credibility and reliability of financial reporting system as a tool for investment decision. This study examines the influence of firm attributes on earnings management. It further explores the role of firm size in moderating the effect of each of the four firm attributes on earnings management in ten listed deposit money banks in Nigeria from 2007 to 2018. The dependent variable, earnings management, is measured by discretionary accruals. The independent variable is firm-specific attributes and four proxies- profitability, leverage, age and growth opportunity serve as its indicators.Regression results from pooled ordinary least square show that firm age has a negative, while growth opportunity has a positive and significant, influence on earnings management. Firm size plays a significant moderating role in the relationship between firm age and earnings management. The outcome of this study provides empirical support for Agency theory. Corporate shareholders, regulatory bodies and other stakeholders are advised to take firm age, growth opportunity and size of banks seriously when policy issues on earnings management practices are discussed and corporate governance principles are to be formulated.