Exploring the Motivation behind Leakage of Internal Audit Reports (Whistle Blowing) in the Public Sector in Kenya
Clement C.M. Akjekwe () and
International Journal of Academic Research in Accounting, Finance and Management Sciences, 2017, vol. 7, issue 4, 62-70
This paper documents evidence that the Nigerian market rewards low earnings per share volatility with higher share prices. Earnings smoothing was measured by the standard deviation of earnings stream over a five year rolling period in addition to the two traditional measures that relate variability of earnings and changes in accruals to cash flows.Multiple regression was employed on a sample of 48 firms from 2013–2015. The study found that Nigerian market rewards stable earnings over time, but are somewhat indifferent to the smoothness of past earnings in relation to cash flows. The practical implication of these findings is that managers of firms in Nigeria will take even “desperate” measures to report stable earnings to boost their firm valuations. The paper recommends that investors should not just reward stable earnings streams; they should be concerned with stable earnings and cash flows stability simultaneously. Failure to do so might result in earnings fraud that erodes their investments.
Keywords: Earnings smoothing; share prices; firm value; stock investment; Nigeria (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://hrmars.com/hrmars_papers/Article_06_Market_ ... rnings_Smoothing.pdf (application/pdf)
http://hrmars.com/hrmars_papers/Article_06_Market_ ... rnings_Smoothing.pdf (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:7:y:2017:i:4:p:62-70
Access Statistics for this article
More articles in International Journal of Academic Research in Accounting, Finance and Management Sciences from Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences
Bibliographic data for series maintained by Hassan Danial Aslam ().