FACTORS INFLUENCING EARNINGS MANAGEMENT PRACTICES AMONG LISTED COMPANIES IN NIGERIA: GENERALIZED METHOD OF MOMENTS (GMM) APPROACH
Authors:
Onaolapo Adekunle Rahman & *shittu Saheed Akande
Abstract:
The study examined the factors influencing Earnings Management Practices (EMP) among listed companies in Nigeria. A sample of 76 non-financial listed firms with 836 firm-year observations was purposively selected for a period 2010-2020. Secondary panel data was collected from the financial reports of these companies. Data were analysed using descriptive statistics and the Generalized Method of Moments (GMM) estimator. The study employed Raman and Shahrur (2008) model to measure Discretionary Accrual EMP. The study revealed that asset structure, free cash flow, dividend payout ratio, firm profitability and working capital had a positive and significant impact, which can affect firm earnings opportunistically, while the capital structure and firm size had a negative influence on EMP in Nigeria. The study, therefore, recommended that listed companies in Nigeria should improve monitoring of their firm characteristics to avoid opportunistic EMP and have quality financial statements.