THE FINANCIAL DETERMINANTS OF EARNINGS MANAGEMENT AND THE PROFITABILITY OF LISTED COMPANIES IN NIGERIA

This study attempts to explore the financial determinants of Earnings Management and the profitability of listed companies in Nigeria. The objective is to investigate the level of financial determinants of Earnings Management on the profitability of companies. This study employed a panel data approach on 84 listed companies on the NSE with 756 firm-year observations for the period 2010-2018 financial years. The study employs a secondary method to retrieve data from annual statement of listed companies and Thompson Reuters DataStream. The data is analysed with the using multiple regression to examine the model. The current study reveals that earnings ability shows a significant and positively related to the profitability, which was measured using ROA. This result from this study indicates that the more the earnings ability of a company, the profitability of the listed companies in Nigeria will increase. Financial structure ability shows a significant negative association with the ROA. This further indicates that any increase in financial structure ability, profitability of listed companies in Nigeria will also increase in the same value. Furthermore, the statistical results offer evidence that non-financial factor is positively and significantly associated with the ROA. This implies that a percentage increase in non-financial factor will result in the increase of profitability of listed companies in Nigeria. The result also indicates that companies that engaged in financial determinants of Earnings Management are also seen to be more profitable. Overall, this present study explains the connection between the financial determinants of earnings management and the profitability of listed companies in Nigeria.