Earnings Management Smoothing and Shareholders’ Wealth in Listed Manufacturing Firms in Nigeria
Keywords:Earnings Smoothing, Shareholders’ wealth, Manufacturing firms.
The study examined earnings smoothing and shareholders’ wealth in listed manufacturing firms in Nigeria between year 2008 and 2018. 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. The data were analyzed using descriptive statistics and inferential statistics. The result revealed a positive significant relationship effect of Asset quality index (AQI) on shareholders’ wealth as the result showed a co-eff of 0.857 with p-values of 0.008 at 5% significant level and a negative effect of Depreciation index (DEPI) on shareholders’ wealth with a co-eff of -0.270 and a p value of 0.015. The study concluded that if the Nigerian manufacturing industry is to be made more effective and developed, earnings management have to be managed to cover all loopholes noted in the study and ensure effective management of the indexes of earnings smoothing. The study recommended that earnings management (AQI and DEPI) 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.
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