AUDIT COMMITTEE ATTRIBUTES AND REAL EARNINGS MANAGEMENT IN NIGERIA

Ahmad Haruna Abubakar; Abubakar Usman; Peter U Anuforo; Baba Yagana Alhaji

doi:10.37231/apj.2021.4.1.254

Ahmad Haruna Abubakar Faculty of Business and Management, Universiti Sultan Zainal Abidin, Malaysia
Abubakar Usman Department of Accounting, Federal University Kashare, Nigeria
Peter U Anuforo Department of Accounting, University of Maiduguri, Nigeria
Baba Yagana Alhaji Department of Accounting, University of Maiduguri, Nigeria

DOI: https://doi.org/10.37231/apj.2021.4.1.254

Abstract

This study extends existing research on the real earnings management by examining the impacts of audit committee attributes on real earnings management in Nigeria. The analyses involve a sample of 72 non-financial firms with 360 firm-year observations for a five-year period (2014-2018). Data was obtained from the annual reports of these companies as well as from Thompson Reuters and Bloomberg databases. The Panel Corrected Standard Error was used to test the model studied. The finding shows that audit committee size prevent managers’ activities in earnings manipulations. Also, the result establish that the audit committee independence presence on the audit committee control managers’ opportunistic behaviour while audit committee financial expertise were monitors in curtailing earnings manipulation practice. The findings shall give insight to financial analysts, investors, and regulators on the importance of AC in enhancing the quality of the financial report, also show the role of the audit committee characteristics to deter real earnings manipulations.

Keywords: audit committee, size, independence, expertise, earnings management

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