International financial reporting standards and earnings management among quoted non-financial firms in Nigeria.
Loading...
Date
2019
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Management and Accounting,Obafemi Awolowo University
Abstract
The study analysed the trend of earnings management in listed non-Financial companies in Nigeria from 2007-2016 and examined the determinants of earnings management among selected listed non-Financial companies in Nigeria during the study period. It also assessed the direction of causality between earnings management and quality of accounting information and evaluated the effect of International Financial Reporting Standards (IFRS) implementation on earnings management of Nigerian quoted non-Financial companies during the period. These were with the view to providing an insight on the effect of the mandatory adoption of IFRS on earnings management among quoted non-financial firms in Nigeria between 2007 and 2016.
Data were collected from primary and secondary sources. The population consisted of 84 quoted non-financial companies in Nigeria. A sample size of 62 non-Financial firms whose shares were traded during the period 2007 - 2016 were purposively selected based on availability and accessibility of data. Year 2007 was chosen as the base year due to the fact that the global economic recession coupled with the high level of international business competitions became prominent making sustainability of performance elusive for reporting entities. Primary data were sourced through the administration of open and close-ended structured questionnaire. Data on IFRS adoption and earnings management were sourced from annual reports and accounts of companies and from Nigerian Stock Exchange Factbooks. Data were analysed using percentages, pooled ordinary least square, random and fixed effect models as well as granger causality test.
The results showed that earnings management witnessed a rising trend in discretionary accrual during the whole ten years` period (2007-2016) from -0.050 in 2007 to 0.036 in 2016 with smallest -0.046 and highest 0.051 in 2012 and 2013 respectively. The results showed that the leverage (r = 0.1150; p < 0.05) and growth (r = 0.006; p < 0.01) were the determinants of earnings management. In addition, the results showed that a bi-directional relationship existed between earnings management (z = 4.860; p < 0.01) and quality of accounting information (z = 4.7976; p < 0.01). Finally, the results revealed that IFRS adoption (r = -0.0616; p > 0.05) showed a negative and insignificant effect on earnings management.
The study concluded that IFRS adoption had no significant effect on earnings management among sampled quoted non-financial firms in Nigeria during the study period.
Description
xv,190p
Keywords
Non-financial firm, Earning management, Nigeria stock exchange, Global economic, International financial reporting standards
Citation
Adegboye,K.A(2019).International financial reporting standards and earnings management among quoted non-financial firms in Nigeria. Obafemi Awolowo University