EARNINGS MANAGEMENT AND FINANCIAL PERFORMANCE OF FIRMS LISTED ON NIGERIA EXCHANGE GROUP

ABSTRACT

This project aims to investigate the relationship between earnings management and the financial performance of firms listed in the Nigeria Exchange Group. Earnings management refers to the practice of manipulating financial statements to present a desired financial performance. The research analyzes financial data from a sample of firms listed in the Nigeria Exchange Group over a certain period. Various indicators of earnings management, such as accruals, discretionary expenses, and income smoothing techniques, will be examined to identify the extent of earnings management practices in these firms. Furthermore, the financial performance of these firms was assessed using key financial ratios, such as return on assets, return on equity, and net profit margin. By comparing the financial performance metrics of firms engaging in earnings management practices with those that do not, the study aims to determine if there is a significant difference in financial performance between these groups of firms. The findings of this research will contribute to the existing literature on earnings management in emerging markets, specifically in the context of firms listed in the Nigeria Exchange Group. Additionally, it will provide valuable insights for investors, regulators, and policymakers, enabling them to make informed decisions regarding the financial health and reliability of firms operating within this market.