FIRM-SPECIFICATTRIBUTES AND EARNINGS MANAGEMENT: DOES SIZE REALLY MATTERAS A MODERATING VARIABLE INNIGERIAN BANKS?
Domaine:
socioeconomicType de record:
paper
Créateur:
SunAdeAbiJay
Éditeur:
Hôte:
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.
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.