ABSTRACT

The type of association between earnings quality management and financial performance of listed manufacturing firms in Nigeria has been a concern in corporate governance literature recently. From financial uses’ standpoint, earnings quality management is an essential tool to the users of financial information because earnings of companies are generally important information components that must be presented in financial statements. The study examined the effect of earnings quality management on the financial performance of listed manufacturing firms in Nigeria. The specific objectives of the study are; to examine the extent to which earnings quality management affect return on equity of listed manufacturing firms in Nigeria, to determine the effect of earnings quality management on return on asset of listed manufacturing firms in Nigeria, to determine the effect of earnings quality management on profit after tax listed manufacturing firms in Nigeria and to determine the effect of earnings quality management on return on asset of listed manufacturing firms in Nigeria. Hence the study employed secondary data which is based on ex-post facto research design and made use of panel data set collected for forty (40) listed manufacturing firms listed on the Nigerian Stock Exchange for the period of 2014- 2018. The data was analyzed using simple regression analysis technique. The study found out that earnings quality management has no significant effect on return on equity of listed manufacturing firms in Nigeria; earnings quality management has no significant effect on return on asset of listed manufacturing firms in Nigeria; earnings quality management has a significant effect on profit after tax of listed manufacturing firms in Nigeria; earnings quality management has a significant effect on return on capital employed of listed manufacturing firms in Nigeria. The study recommends that stakeholders, especially managers and employees must endeavor to apply due diligence especially in corporate financial reporting and other day-to-day organizational activities which should never be detrimental to the real owners of the business (the shareholders); Investors and their advisers should understand the dynamics of earnings quality proxies as a guide in making informed investment decisions and portfolio diversifications strategies particularly in time of investment uncertainties; drafting a well-structured framework of accounting regulation; appropriate and proper measure should put in place for adequate evaluation, examination and scrutinisation of manufacturing firms financial statement.