EARNINGS MANAGEMENT AND FINANCIAL PERFORMANCE OF MANUFACTURING FIRMS LISTED ON NIGERIAN EXCHANGE GROUP
Keywords:
Earnings Management, earnings per share, Financial Performance, net profit margin, returns on assets, returns on equityAbstract
This study ascertaines the effect of earnings management on financial performance of listed manufacturing firms in Nigeria from 2012-2021. Specifically, this study ascertaines the effect of discretionary accruals on returns on assets, returns on equity, earnings per share and net profit margin. Panel data were used in this study, which were obtained from the annual reports and accounts of twenty one (21) sampled manufacturing firms for the periods 2012-2021. Ex-Post Facto research design was employed. Descriptive statistics of the dataset from the sampled firms were used to describe using the mean, standard deviation, minimum and maximum values of the data for the study variables. Inferential statistics using Pearson correlation coefficient and Panel Least Square (PLS) regression analysis were applied to test the hypotheses of the study. The results revealed that discretionary accrual has a positive and significant effect on returns on assets, returns on equity, earnings per share and net profit margin. In conclusion, the study submits that earnings management has a significant effect on financial performance of listed manufacturing firms in Nigeria at 5% level of significance. The study recommended amongst others that firms’ management, investors and stakeholders should come up with appropriate rules and guidelines to facilitate good revenue and expense management for the benefit of spurring the firms’ financial performance.
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