ORGANISATIONAL COMPLEXITY AND EARNINGS MANAGEMENT OF LISTED MANUFACTURING FIRMS IN NIGERIA: DOES INDUSTRY-SPECIALISED AUDITOR MATTER?

Abubakar Ahmed and Madobi Sani Mahmud
Additional contact information
Abubakar Ahmed: Ahmadu Bello University, Zaria, Postal: Department of Accounting, Kaduna, Nigeria,, http://www.icanig.org
Madobi Sani Mahmud: Federal University, Dutsin-Ma, Postal: Department of Business Management, Katsina State, Nigeria, http://www.icanig.org

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2020, vol. 09, issue 2, 85-103

Abstract: Increasing competition and globalization have led to the diversification of Nigerian manufacturing companies, which increased their level of complexity and managerial scope for using discretion regarding the financial reporting process. This study, therefore, examined the effect of organisational complexity on earnings management of listed manufacturing firms in Nigeria and tested whether industry-specialised auditor plays a significant role in the effect. Data were collected through the secondary source from the published annual reports of a sample of 21 manufacturing firms listed on the Nigerian Stock Exchange (NSE) as at December 2017. The study used the Ordinary Least Square (OLS) regression with robust standard errors as the technique of data analysis. The study found that industry complexity has a significant positive effect on earnings management, whereas geographic complexity negatively affects earnings management. Besides, industry-specialised auditor negatively moderates the effect of industry complexity on earnings management. The study recommended that regulatory authorities such as the Securities and Exchange Commission should encourage industrially diversified firms to be audited by the specialised auditors. This can be achieved through moral suasion.

Keywords: Organisational complexity; earnings management; industry-specialised auditor; manufacturing firms. (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://research.icanig.org/documents/Organisation ... Firms-in-Nigeria.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:ijafic:0042

Access Statistics for this article

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF) is currently edited by Ijoema Anasa and Ochuko Jeff Odesa

More articles in International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF) from The Institute of Chartered Accountants of Nigeria (ICAN)
Bibliographic data for series maintained by Daniel Akanbi ().