KOGI STATE

Faculty of Management Sciences

Journal of MANAGEMENT

ISSN: 3212 - 3122

Dan, Patrick B. S. & Essien, Esitime Okon

Abstract

The study investigated the effect of audit firm size and Chief executive officers (CEO’s) demographics on Earnings management in Nigeria drawing samples from listed non-finance firms on the floor of the Nigerian Exchange Group market. While earnings management proxied by Jones discretionary accruals is the dependent variable, the independent variables adopted for this study included audit firm’s size, CEO’s nationality and CEO’s gender. Furthermore, in line with related extant literature, we employed the variable of cash flow from operations to control the model.In the light of this, the empirical result of this study led to the conclusion that the engagement of big4 audit firms by non-finance firms in Nigeria significantly increased earnings management. Furthermore, the conclusion was that, foreign CEOs tend to insignificantly increase earnings management. Succinctly, the recommendation was that, to curb earnings management among nonfinancial firms in Nigeria, regulators should enact policies that promote the engagement of non-big four audit firms as well as the employment of indigenous CEOs.

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Keywords

Audit Firm’s Size, Earnings Management and Non-Finance Firms

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