Effect of Accruals Earnings Management on Share Price of Quoted Nigerian Firms
International Journal of Finance and Banking Research
Volume 5, Issue 4, August 2019, Pages: 105-113
Received: Mar. 27, 2019; Accepted: Aug. 19, 2019; Published: Sep. 2, 2019
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Authors
Ubesie Madubuko Cyril, Department of Accountancy, Enugu State University of Science and Technology, Enugu, Nigeria
Ogbu Samuel, Department of Accountancy, Enugu State University of Science and Technology, Enugu, Nigeria
Mbah Chris Chukwuemeka, Department of Accountancy, Enugu State University of Science and Technology, Enugu, Nigeria
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Abstract
Earnings management occurs during which financial reports are prepared using judgment in order to mislead the stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that are based on the reported earnings. This indicates that managements have incentives to manipulate the earnings in the purpose of maximizing the wealth of the company and/or the manager. This study employed the panel least squares while assuming fixed effects to test the effect of accrual-based earnings management on share prices of ten (10) sectors purposively sampled for twelve (12) years (2006 – 2017) and resulting in one hundred and fifteen (115) observations. The findings of DAA (Discretionary Adjustment Accrual) been positive and significant conforms with prior studies that distinguishes earnings management based on discretionary accruals. This suggests that discretionary accruals adjustment provides managers in Nigerian quoted firms the opportunities to manipulate earnings and hence share prices.
Keywords
Earnings Management, Share Price, Nigerian Firms, Accruals
To cite this article
Ubesie Madubuko Cyril, Ogbu Samuel, Mbah Chris Chukwuemeka, Effect of Accruals Earnings Management on Share Price of Quoted Nigerian Firms, International Journal of Finance and Banking Research. Vol. 5, No. 4, 2019, pp. 105-113. doi: 10.11648/j.ijfbr.20190504.15
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Copyright © 2019 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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