AUDIT QUALITY AND EARNINGS MANAGEMENT OF LISTED CHEMICAL AND PAINTS FIRMS IN NIGRERIA
AUDIT QUALITY AND EARNINGS MANAGEMENT OF LISTED CHEMICAL AND PAINTS FIRMS IN NIGRERIA
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Date
2015-12
Authors
OKOH, Vivian Ngozi
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Abstract
This study examines the relationship between audit quality and earnings management in the
Nigerian chemical and paints sector over a period of seven years (2006-2012).The
management of earnings was measured using Discretionary Accruals (a modified Jones
model). Generalized Least squares technique was used to estimate the regression coefficients
of the data obtained from the eight (8) listed chemical and paints firms using STATA 10. The
results show that, audit firm size has a significant negative impact on the earnings
management of the firms. The study also found that chemical and paints firms that engage the
services of big-4 auditors engage less in earnings management, which implies that the bigger
the audit firms, the lower these chemical and paints firms engage in earnings management.
The results also suggested that audit firm sizehelps in constraining earnings management in
chemical and paints firms, in the sense that it has significant effect on earnings management.
The study recommends among others that, Nigerian chemical and paints sector in conjunction
with audit firms, professional accounting bodies and standard setters should continue to
improve on the quality of their audits, by setting effective quality control, standards and
policies that will help enhance audit quality; reduce the audit firm tenure and engage only the
audit firms that have the appropriate expertise in an industry, as these may have significant
impact on reducing earnings management in the Nigerian chemical and paints sector.
Description
BEING A RESEARCH DISSERTATION SUBMITTEDTO THE SCHOOL OF
POSTGRADUATE STUDIES, AHMADU BELLO UNIVERSITY, ZARIA
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF
MASTERS OF SCIENCE DEGREE (M.Sc) IN ACCOUNTING AND FINANCE
DEPARTMENT OF ACCOUNTING
AHMADU BELLO UNIVERSITY, ZARIA
Keywords
AUDIT QUALITY,, EARNINGS MANAGEMENT,, LISTED CHEMICAL,, PAINTS FIRMS,, NIGRERIA,