This paper further examines the influence of external auditor and board attributes on incidence of discretionary accruals and real earnings management in Nigeria. The sample size comprises fifty (50) purposively selected quoted non-financial firms for a 7 year period (2014–2020), culminating into a 350 dataset. The descriptive statistics depict absence of both discretionary accruals and real earnings management with either classifications dependent upon the auditor-type, board independence and profitability among quoted non-financial firms in Nigeria. The regression results indicate reduction in discretionary accruals owing to concerted audit efforts and lower board size while large profitable firms still possess the tendencies to use discretionary accruals in manipulating earnings. On real manipulative propensities by management, audit fees contribute greatly while auditor-type and presence of female directors on corporate boards exhibit negative and statistically significant association with real earnings management.
Abid, A., Shaique, M., & Anwar ul Haq, M. (2018). Do big four auditors always provide higher audit quality? Evidence from Pakistan. International Journal of Financial Studies, 6(2), 58.
Abubakar, I. A., Ishak, R. B., & Chandren, S. (2017). The effect of board attributes on real earnings management in Nigerian financial institutions. Journal of Accounting, Business and Finance Research, 1(1), 76-83.
Adewale, A. L., Olowookere, J. K. & Bankola, E. O. (2021). Board Composition and Earnings Management of Listed Non-Financial Firms in Nigeria. Gusau Journal of Accounting and Finance, 2(3), 10-10.
Agyei-Mensah, B. K., & Yeboah, M. (2019). Effective audit committee, audit quality and earnings management: evidence from the Ghana Stock Exchange. International Journal of Managerial and Financial Accounting, 11(2), 93-112.
Al-Absy, M. S. M., Ismail, K. N. I. K., & Chandren, S. (2019). Audit committee chairman characteristics and earnings management: The influence of family chairman. Asia-Pacific Journal of Business Administration.
Almarayeh, T. S., Aibar-Guzmán, B., & Abdullatif, M. (2020). Does audit quality influence earnings management in emerging markets? Evidence from Jordan. Revista de Contabilidad-Spanish Accounting Review, 23(1), 64-74.
Chowdhury, S. N., & Eliwa, Y. (2021). The impact of audit quality on real earnings management in the UK context. International Journal of Accounting & Information Management.
Connelly, B. L., Certo, S. T., Ireland, R. D., & Reutzel, C. R. (2011). Signaling theory: A Review and Assessment. Journal of Management, 37(1), 39-67.
Darmawan, I. P. E., Sutrisno, T., & Mardiati, E. (2019). Accrual Earnings Management and Real Earnings Management: Increase or Destroy Firm Value?. International Journal of Multicultural and Multireligious Understanding, 6(2), 8-19.
Firnanti, F., & Pirzada, K. (2019). Company characteristics, corporate governance, audit quality impact on earnings management. Corporate Governance, Audit Quality Impact on Earnings Management (July 12, 2019). Acc. Fin. Review, 4(2), 43-49.
Gull, A. A., Nekhili, M., Nagati, H., & Chtioui, T. (2018). Beyond gender diversity: How specific attributes of female directors affect earnings management. The British Accounting Review, 50(3), 255-274.
Habbash, M. (2010). The Effectiveness of Corporate Governance and External Audit on Constraining Earnings Management Practice in the UK, Durham Theses, Durham University
Hoang, K. M. T., & Phung, T. A. (2019). The Effect of Financial Leverage on Real and Accrual-Based Earnings Management in Vietnamese Firms. Economics & Sociology, 12(4), 299-333.
Idris, M. I. (2012). The Impact of Ownership Structure and External Audit on Accruals and Real Activities Earnings Management in Jordan (Doctoral dissertation, University of Gloucestershire).
Idris, M., Abu Siam, Y., & Nassar, M. (2018). Board Independence, Earnings Management and the Moderating Effect of Family Ownership in Jordan. Management & Marketing, 13(2).
Jensen, M. and Meckling, W. (1976) Theory of the Firm: Management Behavior, Agency. Cost and Ownership Structures. Journal of Financial Economics, 3, 77.
Kajola, S.A., Sanyaolu, W.A., Tonade, A.A., & Adeyemi A., (2020). Corporate Board Attributes and Earnings Management in Nigerian Banking Sector. Journal of Sustainable Development in Africa, 22(4), 1520-5509.
Khalil, U. F. (2022). Auditor choice and its impact on financial reporting quality: A case of banking industry of Pakistan. Asia Pacific Management Review (In Press).
Khanh, H. T. M., & Nguyen, V. K. (2018). Audit quality, firm characteristics and real earnings management: The case of listed vietnamese firms. International Journal of Economics and Financial Issues, 8(4), 243.
Kurawa, J. M., & Aca, A. I. (2020). Audit Quality and Earnings Management of Listed Non-Financial Companies in Nigeria. GSJ, 8(7).
Lakhal, F., Aguir, A., Lakhal, N., & Malek, A. (2015). Do Women on Boards and in Top Management Reduce Earnings Management? Evidence in France. Journal of Applied Business Research (JABR), 31(3), 1107-1118.
Liu, J. L., & Tsai, C. C. (2015). Board member characteristics and ownership structure impacts on real earnings management: Evidence from Taiwan. Accounting and Finance Research, 4(4), 84-96.
Lopes, A. P. (2018). Audit quality and earnings management. Athens Journal of Business & Economics. 4(2), 179-192.
Luo and Jeyaraj (2019). Board Characteristics and Earnings Management: Empirical Analysis of UK Listed Companies. European Journal of Accounting, Auditing and Finance Research, 7(5), 27-54.
Majid, J. A., Latif, R. A., & Musa, A. (2022). Effect of Audit Committee Characteristics on Real Earnings Management through Abnormal Cash Flow. Asian Journal of Economics, Business and Accounting, 76-87.
Mantonti, G., Iuliano, G., Palazzi, F., & Tucker, J. (2021). Earnings Management Techniques in the Context of Italian Unlisted Firms. African Journal of Business Management, 15(2), 79-92.
Manukaji I.J. (2018). Corporate Governance and Income Smoothing in the Nigeria Deposit Money Banks: International Journal of Business & Law Research 6(1): 27-38.
Mohammed, S., & Kurawa, J. M. (2021). Board Attributes and Value of Listed Insurance Companies in Nigeria: The Mediating Effect of Earnings Quality. International Journal of Management Science and Business Administration, 8(1), 7-23.
Mollik, A. T., Mir, M., McIver, R., & Bepari, M. (2020). Effects of audit quality and audit committee characteristics on earnings management during the global financial crisis–evidence from Australia. Australasian Accounting, Business and Finance Journal, 14(4), 85-115.
Oladejo, M. O., Akintunde, A. O., Yinus, S. O., Akanbi, T. A., & Olowokere, J. K. (2021). Impact of Corporate Board and External Audit Attributes on Earnings Quality: Experience from Nigeria Quoted Foods and Beverages Firms. World Journal of Advanced Research and Reviews, 12(3), 612–623.
Orazalin, N., & Akhmetzhanov, R. (2019). Earnings management, audit quality, and cost of debt: evidence from a Central Asian economy. Managerial Auditing Journal.
Ozili, P. K. (2021). Bank earnings management using loan loss provisions: comparing the UK, France, South Africa and Egypt. Journal of Economic and Administrative Sciences.
Panzer, L., & Müller, S. (2015). Earnings Quality and Gender Diversity on German Supervisory Boards: An Empirical Analysis. Problems and perspectives in Management, 13(4), 9-18.
Rajeevan, S. and Ajward, R. (2020), "Board characteristics and earnings management in Sri Lanka", Journal of Asian Business and Economic Studies, 27(1), 2-18.
Saona, P., Muro, L., & Alvarado, M. (2020). How do the ownership structure and board of directors' features impact earnings management? The Spanish case. Journal of International Financial Management & Accounting, 31(1), 98-133.
Saona, P., Muro, L., McWay, R., & San Martin, P. (2021). Does Board Gender Diversity and Remuneration Impact Earnings Quality? Evidence from Spanish Firms. Evidence from Spanish Firms.
Sharma, A. K. (2014). Techniques of Earnings Management. The Business Explorer, 194-197.
Sitanggang, R. P., Karbhari, Y., Matemilola, B. T., & Ariff, M. (2019). Audit quality and real earnings management: evidence from the UK manufacturing sector. International Journal of Managerial Finance.
Soyemi, K. A. (2019). Corporate governance practices and external auditors' reporting lag in Nigeria. Accounting and Taxation Review, 3(4), 113-142
Soyemi, K. A. (2020). Internal corporate governance practices and choice of external auditor in Nigeria: A logistic regression analysis. Binus Business Review, 11(1), 9-16.
Soyemi, K. A., Olufemi, O. A., & Adeyemi, S. B. (2020). External Audit(or) Quality and Accrual Earnings Management: Further evidence from Nigeria. Malaysian Management Journal, 24, 31-56.
Tyokoso, G. M., & Tsegba, I. N. (2015). Audit quality and Earnings Management of Listed Oil Marketing Companies in Nigeria. European Journal of Business and Management, 7(29), 34-42.
Tyokoso, G. M., Sabari, M. H., Dogarawa, A. B., & Ibrahim, H. (2016). Effect of Audit Quality on Earnings Management of Listed Oil Marketing Companies in Nigeria.
Yasser, Sarah, and Mohamed Soliman. "The Effect of Audit Quality on Earnings Management in Developing Countries: The case of Egypt." International Research Journal of Applied Finance 9.4 (2018): 216-231.
Yusuf, A. M. (2021). Effect of Audit Quality on Earnings Management of Listed Consumers Goods Companies in Nigeria. FUDMA Journal of Management Sciences, 3(1), 1-13.
Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter?. International review of financial analysis, 55, 170-183.
Zandi, G., Sadiq, M., & Mohamad, S. (2019). Big-four auditors and financial reporting quality: evidence from Pakistan. Humanities & Social Sciences Reviews, 7(2), 369-375.
All texts published in the Journal "Modern Management Review" are available in the full version on the website of MMR. Digital IDs have also been entered from number 19 (3/2012) (DOI: 10.7862/rz.2018.mmr.1)
Open Access – CC BY-NC-ND 3.0 PL
This is an open access journal which means that all content is freely available without charge to the user or his/her institution. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles, or use them for any other lawful purpose, without asking prior permission from the publisher or the author.