FIRM ATTRIBUTES AND PROFIT MANIPULATION AGGREGATE AMONG QUOTED NIGERIAN INDUSTRIAL COMPANIES

Abstract

Evidence has shown that earnings management (EM) is an endemic problem present in virtually all countries of the world. Most importantly, the effect of firm attributes on EM activities cannot be over-emphasized. Therefore, this study investigated the effect of firm attributes on EM practices. The study adopted ex-post facto design. Published facts were collected from the financial statements of 56 purposively selected quoted industrial organisations in Nigeria from 2003 to 2020 to achieve this objective. The secondary data obtained were subjected to panel data regression. The results of the investigation revealed that: capital intensity had increasing and cogent effect on earnings management aggregate (EMA) of listed Nigerian non-financial firms (coefficient = 1.0516, t-value = 8.2931 and p-value < 0.05); leverage had increasing and cogent effect on profit manipulation aggregate of listed Nigerian industrial companies (coefficient = 0.0098, t-value = 2.0366, p-value < 0.05); and profitability had decreasing and cogent influence on EMA of listed Nigerian industrial companies (coefficient = -0.4826, t-value = -2.7380, p-value < 0.05). The investigation concluded that firm attributes systematically affected the EM of the selected Nigerian companies. This research recommended that firms should address their debt structure, because leverage exhibited significant relationship with the earnings management.

Keywords

• Earnings Management Aggregate
• Capital Intensity
• Profitability
• Leverage