Department of Accounting and Finance

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

Abstract


The study evaluated the effect of firm characteristics on discretionary expenses and discretionary production costs in listed oil and gas firms in Nigeria. The study adopted a longitudinal research approach. The populations of this study encompassed the 12 oil and gas companies listed as of the last quarter of 2021 on the Nigerian Exchange Group (NGX). The study made use of secondary data from the 2002–2021 annual reports of oil and gas companies listed on the Nigerian Exchange Group. The study adopted Pooled Ordinary Least Square (OLS) regression analysis as the method of data analysis. According to the findings, the firm characteristics proxies used had a significant impact on discretionary expense and also firm characteristic variable had a positive effect on discretionary cost. Based on the above findings, this study concludes that firm characteristics play a major role in the management of earnings in Nigeria's oil and gas industry. The study therefore recommended that Managers of publicly traded companies in the oil and gas sector that have discretion in both operating choices and financial reporting may utilise this discretion to increase profit predictability and give stakeholders positive information.


Keywords


Discretionary expenses, Discretionary production cost, Firm characteristics, Oil and gas firms

Full Text:

PDF

References


Araoye, F. E., & Ganiyu, W. A. (2022). Ownership structure and earnings management of listed oil and gas firms in Nigeria. Academic Journal of Accounting and Business Management, 3(2), 41–52.

Awuye, I. S. & Aubert, F. (2022). The impact of leverage on earnings management and the trade-off between discretionary accruals and real earnings management. Journal of Accounting and Taxation, 14(1), 89-101.

Awuye, I. S., (2022). The impact of audit quality on earnings management: Evidence from France. Journal of Accounting and Taxation, 14(1), 52-63.

Bassiouny, S. W. (2016). The impact of firm characteristics on earnings management: an empirical study on the listed firms in Egypt. Journal of Business and Retail Management Research, 10.

Dechow, P., Sloan, R., & Sweeney, A. (1995). Detecting earnings management. The Accounting Review, 70(2), 193- 225.

Ghosh, S. & Ansari, J. (2018). Board characteristics and financial performance: Evidence from Indian cooperative banks. Journal of Co-operative Organization and Management, 6(2), 86 – 93.

Grimaldi, F. (2019). The relationship between financial crisis and earnings management: Some evidence from the Italian context. Corporate Ownership and Control, 17(1), 325-335.

Healy, P. M. (1985). The effect of bonus schemes on accounting decisions. Journal of Accounting and Economics, 7, 85 - 107.

Ibrahim, M., & Abubakar, D. (2019). Board attributes and financial reporting quality of listed deposit money banks in Nigeria. International Journal of Economics and Business Administration, 5(4), 185-192.

Ibrahim, M., & Dauda, A. (2019). Board attributes and financial reporting quality of listed deposit money banks in Nigeria. International Journal of Economics and Business Administration, 4(5), 185-192.

Kalantonis, P., Schoina, P., & Kallandranis, C. (2021). The impact of corporate governance on earnings management: Evidence from Greek listed firms. Corporate Ownership and Control, 18, 140-153.

Okafor, T. G., & Ezeagba, C. E. (2018). Effect of earnings management on performance of corporate organisation in Nigeria. International Journal of Business Management and Economic Review, 1(3).

Oteh, A. (2012). The Nigerian capital market. A submission by the Securities and Exchange Commission in the public hearing organized by the Committee on Capital Market and Other Institutions, House of Representatives of the Federal Republic of Nigeria.

Piot, C., & Janin, R. (2007). External Auditors, Audit Committees and Earnings Management in France. European Accounting Review, 16(2):37-41.

Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42, 3 (December): 335-370.

Saona, P., Laura, M., & Alvarado, M. (2021). How do the ownership structure and board of directors' features impact earnings management? The Spanish case. Journal of International Financial Management & Accounting, 31(2).

Scott, W. R. (2003), Financial Accounting Theory. (3rd ed.). Toronto: Prentice Hall.

Shittu, S. A., Onifade, H. O., Aminu, S. O., & Ajibola, K. T. (2023). Real earnings management and firm value: evidence from Nigeria. Sustainability and Digitisation of Accounting and Finance for Development in Emerging Economies, 6(3), 1-15.

Stocken, P. C., & Verrecchia, F. (2004). Credibility of voluntary disclosure. RAND Journal of Economics, 2(31), 359-374.

Watts, R. L., & Zimmerman, J. L. (1990). Positive accounting theory: A ten-year perspective. The Accounting Review, 1(65), 131-156.

Yuan, T. (2015). Type of Earnings Management and Different Economic Consequences. International Conference on Logistics Engineering, Management and Computer Science, 5(4), 1742-1796

Zayol, P. I., Adzembe, I., & Akaa, S. T. (2017). Determinants of earnings management of listed oil and gas firms in Nigeria. International Journal of Recent Research in Commerce Economics and Management, 4(2), 73-80.


Refbacks

  • There are currently no refbacks.


 

 

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.