Effect of Audit Quality on Earnings Management of Listed Manufacturing Firms in Nigeria

مرکز و کتابخانه مطالعات اسلامی به زبان های اروپایی

منو

" Effect of Audit Quality on Earnings Management of Listed Manufacturing Firms in Nigeria "
Isiaka, Abdulrauf Olayinka Sanni, M.

Document Type	:	Latin Dissertation
Language of Document	:	English
Record Number	:	1104520
Doc. No	:	TLpq2236372442
Main Entry	:	Isiaka, Abdulrauf Olayinka
	:	Sanni, M.
Title & Author	:	Effect of Audit Quality on Earnings Management of Listed Manufacturing Firms in Nigeria\ Isiaka, Abdulrauf OlayinkaSanni, M.
College	:	Kwara State University (Nigeria)
Date	:	2019
student score	:	2019
Degree	:	M.S.
Page No	:	112
Abstract	:	The incessant manipulations of accounting figures in the financial statement of companies globally in the last decade have led to several accounting scandals and corporate failures. This has posed a great challenge on the value relevance of audit due to lack of credibility and integrity of audited financial statements and stakeholders’ confidence in external auditors’ independence as companies engage in earnings management without any report of such in the audited financial statement by the auditors. Therefore, this study examined the effect of audit quality on earnings management of listed manufacturing companies in Nigeria. To achieve this objective, the specific objectives are to: (i) determine the extent to which audit firm size affect earnings management of listed manufacturing firms in Nigeria; (ii) examine the impact of audit fee on earnings management of Nigerian listed manufacturing firms; (iii) assess the effect of audit tenure on earnings management of listed manufacturing firms in Nigeria; and (iv) determine whether there is difference in the level of earnings management practice among the various sub-sectors of the Nigerian manufacturing industry. The study employed ex-post facto research design. The population of the study consists of seventy-four (74) listed manufacturing firms in the Nigeria Stock Exchange as at 31st December, 2017 and fifty (50) companies were selected as its sample size. Secondary data were collected from the annual report and accounts of companies chosen as sample for a period of six years (2012-2017). Panel fixed-effect model technique was employed in testing hypotheses one to three while Analysis of Variance (ANOVA) was used in testing the fourth hypothesis. The study found out that audit firm size and audit fees have significant negative effect on the earnings management (real earnings management) at 95% confidence level (t-values of -2.50 and -3.96 with p-values of 0.013 and 0.000 respectively). This implies that audit firm size and audit fee restrict and reduce the level of earnings management in the listed manufacturing firms in Nigeria. The study also revealed that audit tenure has a significant positive effect (t-value=2.13 with p-value=0.039) on earnings management at 95% confidence level. This implies that lengthy auditor tenure is a mechanism through which management influence auditors to compromise their independence in Nigerian listed manufacturing firms. The result of the study also revealed that there is no significant difference in the level of earnings management practice in the sub-sectors of the listed manufacturing companies in Nigeria (F-stat=1.168 with p-value=0.326). The study, therefore, concludes that, audit quality has significant negative effect on earnings management. The study recommends that professional accounting bodies and Financial Reporting Council of Nigeria (FRCN) to issue a framework or guideline which will back and enforce three years professional requirements for auditors in Nigeria.
Subject	:	Accounting