Gusau Journal of Accounting and Finance (GUJAF) Vol. 5 Issue 1, April, 2024 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 ii © Department of Accounting and Finance Vol. 5 Issue 1 April, 2024 ISSN: 2756-665X A Publication of Department of Accounting and Finance, Faculty of Management and Social Sciences, Federal University Gusau, Zamfara State -Nigeria All Rights reserved Except for academic purposes no part or whole of this publication is allowed to be reproduced, stored in a retrieval system or transmitted in any form or by any means be it mechanical, electrical, photocopying, recording or otherwise, without prior permission of the Copyright owner. Published and Printed by Ahmadu Bello University Press Limited, Zaria, Kaduna State, Nigeria. Tel: 08065949711 e-mail: abupress@abu.edu.ng info@abupress.com.ng abupress2013@gmail.com Website: www.abupress.com.ng mailto:abupress2013@gmail.com http://www.abupress.com.ng/ Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 iii EDITORIAL BOARD Editor-in-Chief: Prof. Shehu Usman Hassan Department of Accounting, Federal University of Kashere, Gombe State. Associate Editor: Dr. Muhammad Mustapha Bagudo Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Managing Editor: Umar Farouk Abdulkarim Department of Accounting and Finance, Federal University Gusau, Zamfara State. Editorial Board Prof.Ahmad Modu Kumshe Department of Accounting, University of Maiduguri, Borno State. Prof Ugochukwu C. Nzewi Department of Accounting, Paul University Awka, Anambra State. Prof Kabir Tahir Hamid Department of Accounting, Bayero University, Kano, Kano State. Prof. Ekoja B. Ekoja Department of Accounting, University of Jos. Prof. Clifford Ofurum Department of Accounting, University of PortHarcourt, Rivers State. Prof. Ahmad Bello Dogarawa Department of Accounting, Ahmadu Bello University Zaria. Prof. Yusuf. B. Rahman Department of Accounting, Lagos State University, Lagos State. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 iv Prof. Suleiman A. S. Aruwa Department of Accounting, Nasarawa State University, Keffi, Nasarawa State. Prof. Muhammad Junaidu Kurawa Department of Accounting, Bayero University Kano, Kano State. Prof. Muhammad Habibu Sabari Department of Accounting, Ahmadu Bello University, Zaria. Prof. Okpanachi Joshua Department of Accounting and Management, Nigerian Defence Academy, Kaduna. Prof. Hassan Ibrahim Department of Accounting, IBB University, Lapai, Niger State. Prof. Ifeoma Mary Okwo Department of Accounting, Enugu State University of Science and Technology, Enugu State. Prof. Aminu Isah Department of Accounting, Bayero University, Kano, Kano State. Prof. Ahmadu Bello Department of Accounting, Ahmadu Bello University, Zaria. Prof. Musa Yelwa Abubakar Department of Accounting, Usmanu Danfodiyo University, Sokoto State. Prof. Salisu Abubakar Department of Accounting, Ahmadu Bello University Zaria, Kaduna State. Prof. Sunusi Sa'ad Ahmad Department of Accounting, Federal University Dutse, Jigawa State. Prof. Isaq Alhaji Samaila Department of Accounting, Bayero University, Kano State. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 v Dr. Fatima Alfa Department of Accounting, University of Maiduguri, Borno State. Dr. Nasiru A. Ka’oje Department of Accounting, Usmanu Danfodiyo University Sokoto State. Dr. Aminu Abdullahi Department of Accounting, Usmanu Danfodiyo University Sokoto, State. Dr. OnipeAdebenege Yahaya Department of Accounting, Nigerian Defence Academy, Kaduna State. Dr. Saidu Adamu Department of Accounting, Federal University of Kashere, Gombe State. Dr. Nasiru Yunusa Department of Accounting, Ahmadu Bello University Zaria. Dr. Aisha Nuhu Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Lawal Muhammad Department of Accounting, Ahmadu Bello University Zaria. Dr. Farouk Adeza School of Business and Entrepreneurship, American University of Nigeria, Yola. Dr. Bashir Umar Farouk Department of Economics, Federal University Gusau, Zamfara State. Dr Emmanuel Omokhuale Department of Mathematics, Federal University Gusau, Zamfara. State Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 vi ADVISORY BOARD MEMBERS Prof. Kabiru Isah Dandago, Bayero University Kano,Kano State. Prof A M Bashir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Muhammad Tanko, Kaduna State University, Kaduna. Prof. Bayero A M Sabir, Usmanu Danfodiyo University Sokoto, Sokoto State. Prof. Aliyu Sulaiman Kantudu, Bayero University Kano, Kano State. Editorial Secretary Yazid Kabir Ibrahim Department of Accounting and Finance, Federal University Gusau, Zamfara State. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 vii CALL FOR PAPERS The editorial board of Gusau Journal of Accounting and Finance (GUJAF) is hereby inviting authors to submit their unpublished manuscript for publication. The journal is published in two issues of April and October annually. 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PAYMENT DETAILS Bank: FCMB Account Number: 7278465011 Account Name: Gusau Journal of Accounting and Finance FOR INQUIRY The Head, Department of Accounting and Finance, Federal University Gusau, Zamfara State. elfarouk105@gmail.com +2348069393824 FOR MORE INFORMATION, CONTACT The Editor-in-Chief on +2348067766435 The Associate Editor on +2348036057525 OR visit our website on www.gujaf.com.ng or journals.gujaf.com.ng http://www.gujaf.com.ng/ http://www.gujaf.com.ng/ Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 ix CONTENTS Impact of Audit Quality on Earnings Management of Consumer Goods Firms in Nigeria Sirajo Bappah, Auwal Saad, Shehu Usman Hassan PhD, Saidu Adamu PhD Board Characteristics and Corporate Social Responsibility of Listed Oil and Gas Companies in Nigerian. Aliyu Abubakar, Yunusa Nasiru PhD, Dr. Umar Abubakar Board Characteristics and Audit Quality of Listed Consumer Goods Firms in Nigeria Aliyu Shehu Usman, Danson Andrew, Abdullahi Bala Ado PhD, CEO Characteristics and Financial Reporting Quality in Listed Consumer Goods Companies in Nigeria Okika Nkiru Philomena, Oyeneye Temitope Esther, Adedeji Daniel Gbadebo Liquidity Risk and Financial Performance of Listed Deposit Money Banks in Nigeria Bashir Abdulrauf Mohammed, Aliyu Ahmed Abdullah PhD, Prof. Salisu Mamman Ibrahim Yusuf PhD, Suleiman Salami PhD Information Asymmetry and Cost of Capital: A Review of Empirical Evidence Sunusi Ridwan Ayagi PhD, ACA, Rashida Lawal, PhD Ownership Structure and Female Inclusion of Listed Financial Firms in Nigeria Gbemigun Catherine Omoleye , Alade Muyiwa Ezekiel Phd CSR Initiatives and Sustainability Resilience in Nigeria's Oil and Gas Industry: A PLS-SEM Approach from Local Communities' Perspective Tajudeen Alaburo, Rofiat Bolanle, Abdussalam, Abdulrahman Abubakar, Tajudeen, Akeem Olamilekan Babatunde Capital Structure and the Financial Performance of Listed Information and Communications Technology Firms in Nigeria Nasiru Adamu Kanoma, Nurudeen Usman Miko, Augustine Ayuba, Idris Mohammed, Mark G, Tagwai Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 x Profitability and Turnover Appraisal of Listed Deposit Money Banks in Nigeria Odogu, Terry Keme Zuode (PhD) and Koroye, Amapamo Stephen Board Attributes and Timeliness of Financial Reports of Listed Non-Financial Firms in Nigeria Rashida Lawal PhD and Prof. Kabir Hamid Tahir Board Independence and Financial Reporting Quality of Listed Oil and Gas Companies in Nigeria: Moderated by Firm Size Adamu Lawal Bello, Prof. J. Okpanachi, Prof. T. Nyor and Lateef Olumude Mustapha (Ph.D) Does ESG Investment Impact the Financial Sustainability of Nigerian Energy Companies: A Panel Regression Approach? Tajudeen Alaburo, Abdulsalam and Adedeji Daniel Gbadebo Board Attributes and Sustainability Reporting of Listed Firms in Nigeria Idris Mohammed, Bejamin K, Gugong PhD, Rofiat Adedokun, Abdulrahman A, Olorunloga and Mark, G, Tagwai Mediating Effect of Internal Auditors’ Ethical Conduct on The Relationship Between Usage of Information Technology, Management Support for Internal Audit Department, and Internal Audit Effectiveness: A Conceptual Framework Nura Badamasi, Adura Binti Ahmad 1 IMPACT OF AUDIT QUALITY ON EARNINGS MANAGEMENT OF CONSUMER GOODS FIRMS IN NIGERIA Sirajo Bappah Department of Accounting Faculty of Management Sciences Federal University of Kashere, Gombe State, soorajj872@gmail.com, +2347036527987 Awwal Saad Department of Business Administration Faculty of Management Sciences Federal University of Kashere, Gombe State, +2348065555512 Saidu Adamu PhD Department of Accounting Faculty of Management Sciences Federal University of Kashere, Gombe State +2348032510222 Shehu Usman Hassan PhD Professor of Accounting and Finance Department of Accounting Federal University of Kashere, Gombe State shehu.hassan@fukashere.edu.ng +234(0)8090222215, +234(0)8057777085 Abstract This study examines the impact of audit quality on earnings management of listed consumer goods firms in Nigeria. The study adopted correlational research design. The population of the covers all twenty-one (21) listed consumer goods firm in Nigeria and two-stages filter was used to arrive at a sample size of fifteen (15) consumer goods firms listed the floor of Nigerian Exchange group as at 31st December, 2022, the data were extracted from annual reports and accounts of the sampled firms for the period of ten (10) years from 2013-2022. Multiple regression was used as a technique of data analysis, regression result shows that audit reporting lag, audit client’s importance and auditor independence have a positive and significant impact on earnings management of the sampled firms, while auditor’s tenure has a negative and significant impact on earnings management. Based on the findings, the study concluded that audit reporting lag, audit client’s importance and auditor independence enhanced the earnings management. while, auditor tenure does not affect earnings management. Based on findings and conclusion, it is therefore, recommends that the regulatory mailto:sirajobappah@fukashere.edu.ng Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 2 bodies such as Financial Reporting Council of Nigeria and Security and Exchange Commission in Nigeria should ensure that audited reports for private companies are release within a regulated period, this is because prolonged audit lagged increase earnings management by giving management of the companies enough time to manipulate earnings. This will impede the users of financial information to take an informed decision. Keywords: Audit Reporting Lag, Auditor clients Importance, Audit Independence, Earnings Management 1. Introduction In current years, earnings management has attracted growing attention in accounting research to the great of audit. The managers, being an agent having extra statistics, can take advantage of the asymmetric data for private gains. The organization trouble may be minimized by monitoring mechanisms of management. Auditing may be used as one form of such tracking techniques which results in minimizing the business enterprise cost (Iatridis, 2012). For this reason, the satisfactory audit is a major concern for numerous stakeholders. The audit report was sometime seen as just a legal requirement and not very useful for many stakeholders (Barghathi, Collison and Crawford, 2018). Therefore, the regulators update the auditing standards to ensure the usefulness and transparency of the audit report for re-establishment of the users’ faith and confidence in financial statements (Moroney, Phang &Xiao 2021). Audit quality may be seen as the joint probability that the auditor would find a breach in the client's accounting system. It covers the dimensions of competence and independence. Earnings management is receiving more attention as a means of manipulation that enables managers to satisfy reporting requirements in specific economic situations (Healy & Wahlen, 1999). The quality of an audit is determined by its capacity to perceive and screen substantial monetary announcement fraud, which include inadvertent and intentional errors, reduce statistics asymmetry among buyers and management, and guide investor safety (Velte, 2023). However, the effect of negative external audit has become a challenge to buyers and different users of economic announcement and in most cases manifest in financial scandals and reason a bad effect at the commercial enterprise. Fraudulent financial reporting has dreadful results for the financial system of any enterprises. It effects includes financial loss and dent on the popularity of the sufferer corporation (Burnaby et al. 2011). Inside the case of Enron, income was overstated by using as a lot as 586 million greenbacks for 4 years. In the case of WorldCom, fraud in 2002 running fees of $3.8billion was capitalized as a consequence overstating its income. In Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 3 Nigeria, the Cadbury (Nig) scandal has remained a reference factor for fraudulent monetary reporting. Despite the fact that there is call for more research on the relationship between audit quality and earnings management, there are scanty studies on the impact of audit quality on earnings management particularly in Nigeria for instance (Abubakar, Mazadu & Yusuf 2020: Afifa, Saleh & Haniah 2021: Alyaarubi, Alkindi & Ahmed 2021: Androjuniko & Sihombing 2022: Debnath, Chowdhury & Khan 2022: Fakhfakh & Jarboui (2022): Kurawa & Ishaku 2020: Orbunde, Oyewobi & Musa 2021: Shehu 2017: Tajudeen 2020: Thomas 2022: Tyokoso, Sabari, Dogarawa & Ibrahim 2016: Yusuf 2021: Zgarni & Chikhaoui 2022). The review of these studies revealed that there are contradictory results explaining the relationship between audit quality variables and earnings management. Hence, a serious need for research of this nature. Again, earlier Nigerian studies have used Dechow and Dechev, (2002), Jones et al (2005), Fracies et al., (2005), changed Jones version as a measurement of discretional accruals as proxy of profits management and those fashions have a variety of criticisms by way of other researchers. therefore, this look at adopts collins et al (2017) model as size of discretional accruals which is more effective examine to those fashions that have used by preceding studies and its most recent version to degree accruals of earnings management. The motivation of this research practically is expected to serve as addition to knowledge in the area of audit quality and earnings management of consumer goods firms. Practically, the findings of this research will serve as a policy guide for the shareholders, management and other stakeholders of firms in Nigeria. Thus, the main objective of the study is to examine the impact of audit quality (proxied by Audit reporting lag, Audit tenure, Audit client importance and Audit independence) on earnings management of listed consumer goods firms in Nigeria. Based on the above objectives, the following research hypotheses have been formulated in a null form to guide the study: H01: Audit reporting lag has no significant impact on the earnings management of listed consumer goods firms in Nigeria H02: Audit tenure has no significant impact on the earnings management of listed consumer goods firms in Nigeria Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 4 H03: Audit client importance has no significant impact on the earnings management of listed consumer goods firms in Nigeria H04: Audit independence has no significant impact on the earnings management of listed consumer goods firms in Nigeria 2. Review of related studies Audit quality has a link with earnings management that can play a significant role in reducing earnings management in listed companies. This study reviewed empirical studies that looked into earnings management and how it responds to Audit quality variables (Audit reporting lag, Audit tenure, Audit client importance and Audit independence). Audit Reporting Lag and Earnings Management Previous research had not given a lot attention on courting among reporting lag and earnings control. Audit report lag is the closing length of the give up of the economic year till the monetary statements are published to interested events (Pizzini et al. 2015). The timeliness of the audit opinion disclosure is enormous in offering proof about the qualified evaluations to carry facts to the marketplace (Afify, 2009). Apadore, Kogilavani and Noor (2013) defined that delays within the presentation of economic statements could lessen the usefulness and economic cost of information. Cohen and Leventis (2013) argue that huge four firms tend to have a stronger incentive to complete their audit work quicker to keep their recognition. Empirically, Fakhfakh & Jarboui (2022) examined the impact of earnings management and audit report lag: The role of audit risk-Tunisian evidence. The findings show that firms which manage their earnings upward are more likely to accelerate the release of their financial statements. In addition, in the Tunisian context, audit risk mediates the relationship between earnings management and audit report lag. Habib and Huang (2019) based effective courting between audit document delay and future price crash and observed that their effects are in step with remark that “excessively lengthy audit file put off regularly alerts financial reporting first-rate problems emanating from horrific information hoarding by means of the control. Rahmawati (2018) founded that groups with a prolonged reporting duration have higher discretionary accruals because they spree up earnings-increasing accruals capacity for next periods Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 5 In contrast to above findings, Lambert et al. (2017) documented a poor effect of shortened reporting cut-off dates on earnings first-class. In this context, Luypaert et al. (2016) furnished that peculiar audit delays can be taken into consideration as a critical poor signal with regard to the high-quality of the financial statements while analyzing corporation’s earnings. Based at the reviewed, most of these studies were carried out outside Nigeria, they findings may not be relevant to Nigeria, due to cultural, socioeconomic distinction. therefore, this gives room for extra studies on this vital variable. Audit Tenure and Earnings Management Audit tenure is another important variable that link to the earnings management because increase in the length of audit tenure is related with increased expertise factors and related with incentives to defend status which may increases audit quality as well increased incentives to please the client which may lead to reduces audit quality. Thomas (2022) investigated the effect of audit quality on earnings management of listed consumer goods companies in Nigeria. It was found that auditor tenure has no significant influence on earnings management of listed consumer goods companies in Nigeria. Orbunde, Oyewobi and Musa (2021) examined the effect of audit quality on earnings management of listed oil marketing companies in Nigeria. The result multiple regression analysis revealed that auditor tenure has a negative and significant impact on earnings management of listed oil marketing companies in Nigeria. Kurawa and Ishaku (2020) asserted the impact of audit quality on earnings management of listed non-financial companies in Nigeria. The findings revealed that auditor tenure has positive but not significant effect on earnings management. Tyokoso, Sabari, Dogarawa and Ibrahim (2016) examined the effect of audit quality attributes on earnings management of listed oil marketing companies in Nigeria. The findings of the study showed that auditor tenure is negatively and significantly associated with earnings management of the firms. Contrary to the above findings Zgarni and Chikhaoui (2022) empirically examined the impact of audit quality on real earnings management: evidence from Tunisian banks. They conducted an empirical study with a sample of the main Tunisian commercial banks observed over a period of 14 years from 2006 to 2019, using the panel data method. The results indicate that the tenure of auditors increases these Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 6 discretionary practices. Similarly, Yusuf (2020) investigated the effect of audit quality on earnings management of listed consumer goods firms in Nigeria for thirteen years from 2006-2018. The findings revealed that audit tenure has a significant positive effect on earnings management. The findings from the reviewed literatures in this section provide contradictory evidences, while some studies uncovered positive relationship between audit tenure and earnings management. Methodologically, it is noteworthy that the majority of reviewed studies have used dehow and dechew (2002) model which has criticism by other researchers. Audit Client Importance and Earnings Management Audit client importance is another essential attribute of audit quality capable of affecting the earnings management in a firm. Audit Client importance may be attributed to the economic status of an auditor’s client usually tied to performance. Azende, Iorpev, and Ganyam, (2022) investigated the impact of audit consumer importance on income management of Nigerian indexed patron goods corporations from 2012 to 2019. The descriptive research design approach was adopted at the same time as descriptive statistics and random results regression were used to examine the look at’s statistics that became acquired from 13 customer items companies quoted on the Nigerian inventory exchange. The findings reveal that audit customer importance has a terrible and good-sized impact at the earnings control of Nigerian quoted client goods corporations. Tyokoso, Sabari, Dogarawa and Ibrahim (2016) examined the effect of audit best attributes on profits management of listed oil advertising and marketing groups in Nigeria. The findings of the observe showed that audit customer significance is definitely related to income management of indexed oil marketing corporations in Nigeria. The findings from the reviewed literatures on this section provide contradictory evidences, whilst a few studies uncovered fantastic courting between audit patron importance and earnings control. but, reviewed shows that there may be a scanty observe between client significance and earnings management in Nigerian context. Audit Independence and Earnings Management External auditors are providing crucial services to protect the pastimes of the investing public in the capital market. For them to perform such expert challenge, accounting firms should stay independent of the audit customer and keep away from undue influence. even though, the appointment and firing of auditors is Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 7 manipulate through auditor patron’s management, managers can also use risk to acquire a extra beneficial document from an incumbent auditor. Therefore, it inflicts an enormous burden upon the auditors to face firm. Mautz and Sharaf (1961) advanced an idea of independence with additives: practitioner ‘s independence and professional independence. in keeping with them, practitioner ‘s independence is a nation of thoughts and equates the notion of integrity and objectivity of the man or woman auditor. Professional independence then again, is plain independence of auditors, as a expert group, to the general public. This means that an auditor should avoid undue influence. Abubakar, Mazadu and Yusuf (2020) examined the impact of audit quality and earnings management of listed Insurance companies in Nigeria over the period of 5 years (2015-2019). The regression result shows that auditor independence has negative and insignificant impact on earnings management. On the other hand, Androjuniko & Sihombing (2022) assessed the effectiveness of audit committee and audit quality towards earnings management of ASEAN public companies. The result from various tests in the paper indicates that audit independence does affect earnings management significantly. Kurawa and Ishaku (2020) determined the relationship between audit quality and earnings management of listed non-financial companies in Nigeria. The findings revealed that auditor independence has positive but not significant effect on earnings management. Shehu (2017) examined the impact of Audit Quality on Earnings Management in the Nigerian cement industry. The result shows that; audit independence does not have significant impact on earnings management. 3. Design, models and methods The study adopted correlational research design being the fact that it is post positivism paradigm which hint at being quantitative in nature. The population of the study covers all twenty-one (21) consumer goods firms listed on the floor of the Nigerian Stock Exchange as at 31st December 2022. The study utilized the census sampling techniques to arrive at a sample of fifteen (15) firms that include Cadbury Nigeria Plc., Champion Breweries Plc., Dangote Sugar Refinery Plc., Flour Mills Nig. Plc., Guinness Nigeria Plc., Honeywell Four Mill Plc., International Breweries Plc., MCNichols Plc., Nestle Nigeria Plc., Nigerian Breweries Plc., Nigerian Enamelware Plc., Nigerian Flour Mills Plc., Nascon Allied Industries, PZ Cusson Nigeria Plc., Unilever Nigeria Plc., and Vita foam Nigeria Plc. after employing two filters. The first filter excludes does consumer goods firms that have not been listed http://www.nse.com.ng/Regulation/ForIssuers/_layouts/listform.aspx?PageType=4&ListId=%7B2EC7DEFC-5A1E-4FE0-8DC3-FFD06EAC9241%7D&ID=27&ContentTypeID=0x0100BF1B244FE2F68946AF21AF64CB9FD7FC http://www.nse.com.ng/Regulation/ForIssuers/_layouts/listform.aspx?PageType=4&ListId=%7B2EC7DEFC-5A1E-4FE0-8DC3-FFD06EAC9241%7D&ID=41&ContentTypeID=0x0100BF1B244FE2F68946AF21AF64CB9FD7FC http://www.nse.com.ng/Regulation/ForIssuers/_layouts/listform.aspx?PageType=4&ListId=%7B2EC7DEFC-5A1E-4FE0-8DC3-FFD06EAC9241%7D&ID=55&ContentTypeID=0x0100BF1B244FE2F68946AF21AF64CB9FD7FC http://www.nse.com.ng/Regulation/ForIssuers/_layouts/listform.aspx?PageType=4&ListId=%7B2EC7DEFC-5A1E-4FE0-8DC3-FFD06EAC9241%7D&ID=130&ContentTypeID=0x0100BF1B244FE2F68946AF21AF64CB9FD7FC Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 8 for the entire period of the study, while the second filter excludes firms with incomplete annual reports covering the periods of study looking for the nature of measurement of earnings management. Data were extracted from the annual reports and accounts of listed consumer goods firms in Nigeria for the period of ten (10) years from (2013-2022). Statistical tools such as descriptive, correlation and regressions were employed to describe and analyse the data of the study. The review: Variables Measurement Variables Proxies Variables Measurement Source Dependent Discretionary Accruals (DACC) Measured by absolute values of the residuals of discretionary accruals using Collins (2017) model Collins, Pungaliya and Vijh (2017) Independent Control Audit Reporting Lag (ARL) Number of days from fiscal year end to the date of audit report Kaaroud et al., 2020; Otuya 2019 Audit Tenure (ADT) Number of consecutive years that the auditor has audited the firm Thomas (2022). Audit Client Importance (ACI) Ratio of client sales to the sum of all client’s sales audited by an auditor within the sample size Tyokoso, Sabari, Dogarawa, and Ibrahim (2016). Audit Independent (ADI) Non-audit fees divided by total audit fees Kurawa and Ishaku (2020), Abubakar, et al (2020). Leverage (LEV) Proportion of total debt to total assets Bappah, Ardo, Adamu and Shehu (2021), Abubakar, Abdullahi Alakantara and Saleh (2021). Firm Size (FSZ) Natural Logarithm of total assets. Abubakar, Sulaiman and Haruna (2018). Sources: Developed by the researcher 2023 Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 9 Model Specification The following models were used to empirically measured the earnings management and equally test the hypotheses of the study. The dependent variable model representing earnings management is specified as follows; TA it /At-1 = β0 + β1∆REVit /At-1 + β2∆NRECit /At-1 + β3PPEit t-1/At-1 + ε it i TAit /At-1 =β0+β1∆REVit /At-1+β2∆NRECit/At-1+β3PPEit t-1/At-1+β4INTGit t-1/At-1 + it ii ACCR=β0it+β1∆REVit+β2∆NRECit+β3INVit+β4PPEit+β5INTGit+β6CLit+β7NCL it+εit-iii TAit/Assetsit-1=β0 + β11/Assetsit-1 + β2 (∆REV-∆AR) it / Assetsit-1 + β3 PPEit / Assetsit-1 + β4 NIit- 1 / Assetsit-1 + β5 Salesit - Salesit-1 / Salesit-1 + εit iv Where: TA= Total Accruals; T = total asset; a = Constant; β1-β4= parameters; t-1 = previous year (lag1); REV = Change in Revenue; REC = Change in Receivables; AR= Change in Account Receivable; PPE = Property, Plant & Equipment; INTG = Intangible Assets; INV= Inventory CL= Current Liabilities; NCL= Non-current Liabilities; ACCR= Discretionary Accruals; t=time; i = firm; ε = is the residual Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 10 However, the parsimonious model of the study is specified as follows: DCCRit = β0+ β1ARLit+β2ADTit+β3ACIit+ β4ADIit + β5LEVit + β6FSZit + εit……………………(1) Where: DCCR= discretionary accruals ARL= audit reporting lag AT= audit tenure ACI= audit client importance ADI= audit independence LEV= leverage FSZ= firm size β0= Constant β1- β6= coefficient of the parameters it= firm and year Ɛ= error term 4. Results and Discussion This presents the descriptive statistics, correlation. It also analyses the results obtained from the regression output and other robustness tests were discusses. Descriptive Statistics The descriptive statistics of explanatory and dependent variables of study were analyzed. The description of mean, standard deviation, minimum, and maximum of the variables were computed using STATA version13. Table 2: Descriptive Statistics Variable Obs Mean Std. Dev Min Max DCCR 150 0.100446 0.05442 0.00017 0.27890 ARL 150 78.72310 14.9384 56.0000 146.000 ADT 150 0.57407 0.49912 0.00000 1.00000 ACI 150 0.59260 0.35180 0.02839 1.00000 AIN 150 4.05011 2.15330 0.75100 8.25000 LEV 150 0.42614 0.11224 0.26620 0.50000 FSZ 150 9.47200 0.77010 8.16210 11.18200 Source: STATA OUTPUT version 13 Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 11 Table 2 reports the descriptive statistics for the both dependent and independent variables respectively (Discretionary accruals, audit reporting lag, audit tenure, audit client importance and audit independent). The results show that the Discretionary accruals (DCCR) of the listed consumer goods firms has average value of 0.100, with standard deviation of 0.054, the minimum and maximum values of 0.001 and 0.279 respectively. Table 2, shows that audit reporting lag has a mean value of 78.723 with a standard deviation of 14.938, the minimum number of 56 days and maximum of 146 days. These implies that on average listed consumer goods firms in Nigeria release their audited report 79 days after accounting year during the period under review, with a minimum number of 56days and maximum of 146days release their reports. However, descriptive statistics from Table 2 also shows that audit tenure had a mean value of 0.574 during the study period. This value indicates that 57% of the sampled consumer goods firms retained their auditors for a period of three years and above. The minimum and maximum values of auditor tenure during the study period are zero and one respectively, because the variable was measured by dichotomous numbers. Moreover, from table 2 above, it was observed that the mean value of audit client importance is 0.593 with standard deviation of 0.352. The client importance has a minimum value of 0.028 and maximum values of one (1) during the study period. Finally, audit independent has a mean value of 4.050 with standard deviation of 2.153; this signifies that there is no wide dispersion between mean and standard deviation. This imply that on average 41% of the auditors are independent non- executive directors of the consumer goods firms in Nigeria during period of the study, the minimum and maximum value of 0.751 and 8.250 respectively. This signifies that listed consumer goods firms in Nigeria have a minimum of 75% of independent non-executive director. Correlation Matrix The correlation matrix is used to find out the degree of relationship between dependent variable and independent variables used in the study presented in Table 3. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 12 Table 3: Correlation Matrix Variable DAC ARL ADT ACI AIN LEV FSZ DCCR 1.000 ARL 0.370 1.000 ADT -0.296 0.292 1.000 ACI 0.276 -0.379 -0.009 1.000 AIN -0.375 0.276 0.431 -0.229 1.000 LEV 0.417 -0.321 -0.192 0.341 0.325 1.000 FSZ 0.427 0.271 0.302 0.257 0.351 0.251 1.000 Source: STATA OUTPUT, 2023 From the correlation results presented in Table 3 the relationship between discretionary accruals with the independent variables (i.e. audit reporting lag, audit tenure, audit client importance and audit independent) indicated that audit reporting lag, audit client importance, leverage and firm size are positively strongly correlated with discretionary accruals, while audit independent is negatively strongly associated with earnings management. However, audit tenure has a negative and strong association with earnings management of the listed consumer goods firms in Nigeria. From Table 3 it was observed that audit reporting lag (ARL) has a positive strong association with other explanatory variable with exception of audit client importance and leverage which has negative strong correlation with audit reporting lag. However, audit tenure (ADT) has a positive strong relationship with audit independent and firm size while negative and weak relationship with audit client importance and leverage. Table 3 also, audit client importance (ACI) has a positive strong correlation with leverage and firm size while a weak negative relationship with audit independent. Similarly, audit independent (AIN) has a positive strong relationship with other variables of the listed industrial goods firms in Nigeria. Regression Results This shows the summary of the multiple regression results obtained from the model using ordinary least square regression. The results show individual effect of independent variables (audit reporting lag, audit tenure, audit client importance and audit independent on earnings management) and shows the cumulative impact of independent variables on dependent variable. This is presented in table 4 below. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 13 From the table above, the results show an overall R square of (0.286), that is the coefficient of determination which represents the proportion of change in earnings management as explained by independent variables. This show that 29% changes in the earnings management is expound by explanatory variables used in the model; this suggests that the explanatory variables cumulatively bring about 29% changes in listed consumer goods firms in Nigeria while 74% is explained by other variables not included for by the model. The F text results show the p-value of 0.002, this denotes that the model is fit and the variables are properly designated. However, robustness test was carried-out in order to ensure the validity of all statistical inferences for the study. These tests include multicollinearity, heteroscedasticity, Normality of residuals. Multicollinearity exists, when there is a perfect correlation between two or more independent variables and where there is a perfect correlation among the independents variables errors may be inflated and the estimates for a regression model cannot be exclusively calculated. Therefore, this study employed Variance Inflation Factor (VIF) to check whether there is present of multicollinearity in this study. The result indicates that the mean VIF is 2.27 which is less than 10 this shows absence of multicollinearity. Table 4: Summary of Regression Result Variable Coefficient T-value P-value ARL 0.019 2.932 0.005 ADT -0.451 -3.130 0.003 ACI 0.086 3.084 0.004 AIN 0.156 3.193 0.002 LEV 0.763 0.760 0.218 FSZ 0.082 3.561 0.000 Constant -0.178 -2.912 0.005 Adjusted R-sq. 0.286 F- value 5.08 Prob. (F) 0.002 Mean VIF 2.27 Hausman Test 0.0000 Source: STATA OUTPUT, Version 13. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 14 Furthermore, heteroscedasticity test was executed to find out whether the disturbances appearing in the population regression function are Homoscedastic (same variance). Breusch- Pagan/Cook-Weiberg test for heteroskedasticity is performed. The result is shows that the value of chi square of 1.19 while its probability is 0.278 which is not significant at 5%. This indicates absence of Heteroskedasticity and shows the present of Homoskedastic. Finally, hausman specification test was conducted to select between fixed and random effect, the results show that the fixed effect is more appropriate than random effect considering Prob>chi2 of 0.0000. In evaluating the model based on the regression results, audit reporting lag as indicated in table 4 has a positive and significant impact on earnings management of consumer goods firms in Nigeria considering the coefficient value of 0.019 with p-value of 0.005 which is significant at 5% level of significance. The finding is in line with Habib and Huang (2019) but contradicts Luypaert et al. (2016) who found positive relationship between audit report delay and earnings management. Also, the coefficient of audit tenure is -0.451 and its probability of 0.003. this indicates that audit tenure has a negative and significant impact on earnings management of consumer goods firms in Nigeria. This result showed that any increase in audit tenure will lead to a positive and significant increase in the rate of earnings management by industrial goods firms in Nigeria. However, the Table 4 shows that audit client importance has a positive and significant effect earnings management of listed consumer goods firms in Nigeria with a coefficient of 0.086 and probability of 0.030. This is an indication that client importance is associated with increase in earnings management of firms. This finding supports the work of Tyokoso, et al. (2016) which showed that audit client importance is positively and statistically significant associated with earnings management but contradicts the findings of Azende, Iorpev, and Ganyam, (2022) who found that audit client importance has a negative and significant effect on earnings management of listed consumer goods firms in Nigeria. The table 4 also reveals that audit independent is positive and statistically significantly associated with earnings management considering the coefficient value of 0.156 with p-value 0.002 which is significance at 5% level of significance. The finding is in contrast to Shehu (2017) who found that audit independence does not have significant impact on earnings management. Gusau Journal of Accounting and Finance, Vol. 5, Issue 1, April, 2024 15 Leverage is positive and insignificantly related to earnings management of listed consumer goods firms in Nigeria with a coefficient value of 0.763 and p-value of 0.218. On the other hand, firm size has a positive and significant effect on earnings management of listed consumer goods firms in Nigeria considering the coefficient value of 0.083 and p-value of 0.0000 which is significant at 1% level of significance. 5. Conclusion and Recommendations This study has empirically provided evidence on the relationship between audit quality proxies by audit reporting lag, audit tenure, audit client importance and audit independent to represent audit quality and discretionary accruals as a proxy of earnings management. Based on statistical evidence, it is therefore concluded that audit reporting lag, audit client importance and audit independent enhanced earnings management during period under review. However, it’s also concluded that audit tenure impacted on earnings management negatively of listed consumer goods firms in Nigeria during the period under review. In line with findings and conclusions drawn from the study, therefore, this recommends that the regulatory bodies such as Financial Reporting Council of Nigeria and Security and Exchange Commission in Nigeria should ensure that audited reports for private companies are release within a regulated period, this is because prolonged audit lagged increase earnings management by giving management of the companies enough time to manipulate earnings. This will impede the users of financial information to take an informed decision. It is also recommended that management of the consumer goods firms sub-sector of the Nigerian manufacturing sector should discouraged lengthy audit firm tenure in order to avoid familiarity threats. 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