Earnings management and shareholders' wealth in listed manufacturing firms in Nigeria
Abstract The study examined earnings management and shareholders' wealth in listed manufacturing firms in Nigeria. This was done with a view to explore the pressures on management to manage earnings by manipulating the company's accounting practices to meet financial expectations of shareholders and keep the company's stock price up. Ex–post Facto research design was adopted for this study. A sample of twenty-one (21) listed manufacturing firms were selected out of sixty-seven (67) manufacturing firms listed on the Nigerian Stock Exchange as at 31 December, 2018 using purposive sampling technique. Data were collected from secondary sources through the annual reports of sampled firms and Fact book of the Nigeria Stock Exchange for a period of 2008 to 2018. Data were analyzed using descriptive statistics and inferential statistics. The result revealed a positive significant relationship effect of sales growth index (SGI) on shareholders' wealth. However, further result also revealed a negative effect of leverage index (LEVI) on shareholders' wealth. The study concluded that if the Nigerian manufacturing industry is to be made more effective and developed, earnings management have to be managed in such a way that it will cover all loopholes noted in this study to ensure effective management of the indexes of earnings. The study recommended that earnings management (SGI and LEVI) should be paramount in the effective running of the manufacturing industry in Nigeria since effects of the explanatory variables have substantial effects in increasing market value added, either in short run or long run. Keywords: Earnings management, leverage,…