A Comparative Analysis of Earnings Management and Financial Performance of Listed Financial and NonFinancial Firms in Nigeria
Abstract The study conducted a comparative analysis of earnings management and financial performance of listed firms in Nigeria; to ascertain the sector that indulges in earnings management more and the effect on the financial performance of the firms. Earnings management was proxy by discretionary accrual (DACC) and the financial performance was proxy by Return on Assets (ROA). Ex-post facto research design was employed for the study. The population of the study comprises of 50 financial and 106 non-financial business enterprises listed on the Nigeria Exchange Group as at 31st December, 2021. Purposive sampling technique was employed to purposively select 15 companies from each sector as the sample size. Data were sourced from secondary sources through the published annual reports of the selected companies. The study covered a period of 2011 to 2021. Data gathered were evaluated via descriptive statistics and panel data regression analysis. The results revealed that the firms in the non-financial sector engage more in earnings management practices than the financial sector. The study also showed that earnings management has a significant positive effect on the financial performance in both sectors. The study concluded that, despite the theoretical explanations on the negative consequences of this practice on the firms and the stakeholders, the management are still indulging in the manipulations for personal gains and lot of financial scandals occurred in the air of verified auditors’ reports and the enacted rules by the regulatory authorities. The study recommended that the regulatory bodies should put in place measures to checkmate…
Keywords: Earnings management, financial performance, comparative analysis, financial firms, non-financial firms, discretionary accruals, return on assets
Citation: Igbekoyi, O.E., Oluwagbade, O.I., & Fagbomedo, B.I. (2025). A Comparative Analysis of Earnings Management and Financial Performance of Listed Financial and NonFinancial Firms in Nigeria. International Journal of Innovative Research in Accounting and Sustainability, 10(2), 49-62.