GAUGING THE NEXUS BETWEEN FIRMS ATTRIBUTES AND REAL EARNINGS MANAGEMENT: EVIDENCE FROM LISTED CEMENT COMPANIES IN NIGERIA
Aliyu A. Almustapha , Umar Salim Ibrahim and Dalhatu Kamilu
Volume 13 Issue 2
Abstract
This study examines the nexus between firm attributes and real earnings management among listed cement companies in Nigeria. Specifically, it evaluates how firm size, audit quality, and firm age influence the extent of real earnings management practices. Given the strategic importance of the cement industry to Nigeria’s economic development, the sector provides a relevant setting for assessing how internal firm characteristics shape financial reporting behaviour. The study adopts a quantitative ex-post facto research design and utilizes secondary data from three publicly listed cement firms over the period between 2014 to 2021. The empirical findings indicate that firm size exhibits a positive but statistically insignificant association with real earnings management, suggesting that larger firms may have greater incentives or opportunities to engage in such practices. In contrast, audit quality demonstrates a significant negative relationship, implying that higher-quality audits serve as an effective constraint on earnings manipulation. Furthermore, firm age is found to be positively associated with real earnings management, indicating that more established firms may be more inclined toward such practices, thereby highlighting the need for continuous strengthening of governance mechanisms. The findings offer important implications for regulators, auditors, and corporate stakeholders by emphasizing the need to enhance audit quality and corporate governance frameworks to improve financial reporting transparency and credibility. Keywords: Firm Size, Audit Quality, Firm Age and Real Earnings Management
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