EFFECT OF FIRM CHARACTERISTICS ON DISCRETIONARY ACCRUAL IN NIGERIAN LISTED OIL AND GAS FIRMS

Christopher Akinwale Da-Silva, Godwin Emmanuel Oyedokun, Chris Chigo Uchehara

Abstract


The study examined the effect of firm characteristics on discretionary accrual in Nigerian listed oil and gas firms. The research adopted a longitudinal research approach. The study populations are the 12 oil and gas companies that were listed as of the last quarter of 2021 on the Nigerian Exchange Group (NGX). The study heavily depended on secondary data from the 2002–2021 annual reports of oil and gas companies listed on the Nigerian Exchange Group. A simple random sampling technique was used to select nine firms out of the twelve firms for the study. The study employed Pooled Ordinary Least Square (OLS) regression analysis as the method of data analysis. Findings showed that the nature of firm characteristics has no significant effect on discretionary accruals in listed oil and gas firms in Nigeria. Based on the above findings, this study concludes that firms in the oil and gas industry use effective earnings management through their discretionary accruals. The study therefore recommended that regulators should mandate that businesses include a brief explanation and disclose in their financial statements how they employ variable components, such as accruals, cash flows, expenses, and total production cost, varying from year to year.


Keywords


Discretionary accrual, Firm characteristics, Financial statements, Oil and gas firms

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