European Journal of Accounting, Finance and Investment

Audit Attribute, Firm Size And Earnings Management Of Listed Companies In Nigeria

John D. Zukbee PhD

Rivers State University, Port Harcourt, Nigeria.

Keywords: Audit attribute, Earnings management, Firm size, Agency, Discretionary accruals

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Abstract

Abstract

The paper examined the relationship between external audit and earnings management of manufacturing companies in Nigeria. With a sample of thirteen listed manufacturing companies in the consumer goods sector for a period of seven years, and the application of the Ordinary Least Square multiple regression technique, in addition to other robustness tests, the analysis of a pool of secondary data (panel) obtained from the published annual reports of the sampled firms yielded a significant positive relationship between the two main variables. The implication is that variation in earnings management is significantly predicted by the audit attribute. Consequently, the paper recommended, among others, that compensation for external auditors should include upward review of the audit fee annually and the provision of necessary resources both financial and otherwise to enhance quality audit.

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