EARNINGS MANAGEMENT AND TAX AVOIDANCE OF MULTINATIONAL MANUFACTURING COMPANIES LISTED ON NIGERIAN EXCHANGE GROUP
Keywords:
Book-Tax Differences, Discretionary Accruals, Earnings Management, Effective Tax Rate, Tax AvoidanceAbstract
The main objective of the study is to ascertain the effect of earnings management on tax avoidance of Multinational Manufacturing Companies in Nigeria. The study specifically ascertains the effect of discretionary accruals on effective tax rate and the book-tax differences of Multinational Manufacturing Companies. The study adopted the ex post facto research design. The final sample comprised of ten (10) multinational manufacturing Companies based on data availability during the study period, 2012-2024. The data were analyzed using the Panel Estimated Generalized Least Squares (EGLS) technique. The results revealed that discretionary accruals have a positive and significant effect on effective tax rate and on book-tax differences. In conclusion, the study submits that earnings management has a significant effect on tax avoidance of listed multinational manufacturing companies in Nigeria at 5% level of significance. The study recommended that the Federal Inland Revenue Service (FIRS) should enhance its capacity to detect and analyze accrual-based earnings manipulation by strengthening forensic tax audits and integrating accrual quality assessments into tax risk profiling tools; Financial Reporting Council of Nigeria (FRCN) should enforce stricter oversight on earnings management practices by promoting improved disclosure requirements and reviewing the consistency of firms’ reported earnings with underlying economic activities.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Journal of Global Accounting
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Articles submitted to JOGA should not have been published or are currently under review by another Journal. Kindly see the guide for the preparation of the manuscript for details. Successful submission of articles by author(s) for publication clearly implies that the work is not an infringement of any existing copyright warranty as JOGA reserves the right to be indemnified by the author(s) where any breach of such warranty is proven. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of JOGA once published unless otherwise agreed.
Permission clearance should be obtained by the author(s) where applicable for the use of any content of interest not originally created by them. This must be done before the submission of the article to JOGA. Failure to do so may lead to a lengthy delay in publication, as JOGA is unable to publish any article which has permissions pending. Thus, the rights JOGA requires are:
- Non-exclusive right to reproduce the material in the article or book chapters.
- Print and electronic rights.
- To use the material for the life of the work (for instance, there should be no time restrictions on the re-use of material).
Where tables, figures or excerpts of more than 250 words are reproduced from another source, it is expected that:
- Author(s) should obtain the necessary written permission in advance from any third-party owner of the copyright for the use in print and electronic formats of any of their text, illustrations, graphics, or other material in their manuscript. Permission must also be cleared for any minor adaptations of any work not originally created by the author(s). The author (s) should not assume that any content freely available on the web is free to use.
- Where the author adapts a significant number of any material, the author(s) must inform the copyright holder of the original work.
- Author obtains any proof of consent statements
- The author must acknowledge figure(s) and content adopted or adapted in work utilizing source(s) and further capture them in the list of references.
