FIRM ATTRIBUTES AND EARNINGS MANAGEMENT OF LISTED DEPOSIT MONEY BANKS IN NIGERIA: DOES DIVIDEND PAYOUT MATTERS?

Abstract

Most Nigerian banks are known to pay dividend to investors, despite been characterized with high non-performing loan, dwindling financial performance, increased tax liability and weak internal control system. The objective of this study to find out whether dividend payout influences earnings management of listed deposit money banks. Specifically, the research also examined whether profitability, tax rate, firm size and internal control system are functions of earnings management of Nigerian listed deposit money banks. The sample is a census of the population of 14 listed deposit money banks. Quantitative data were extracted from the financial statements of these listed deposit money banks for the period under review and multiple regressions was the technique of analysis used. Robustness test (heteroscadasticity and multicollinearity) were carried out to establish model reliability. Findings revealed that Dividend payout influences earnings management of deposit banks at <5% significant level and based on the finding; the study concludes that banks that payout dividend regularly are constrain to manage earnings opportunistically. The study recommends that banks should comply and sustain CBN directives on thresholds as a prerequisite for dividend payment as this will significantly inhibit earnings management practices.

Keywords

• Dividend Payout
• Profitability
• Tax rate
• Firm size
• Internal Control System