The Impact of Leverage on Accrual-Based Earnings Management

Egiyi, Modesta Amaka (2021) The Impact of Leverage on Accrual-Based Earnings Management. Studies, 8 (2). pp. 1-9. ISSN 2754-4176

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This study investigated the Impact of Leverage on Accrual-Based Earnings Management for a sample of Nigerian companies, excluding financial and insurance companies, listed on the Nigerian stock exchange for the period 2000- 2020. Secondary data were collected from the Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators. This study uses the Hribar and Collins (2002) model and the Kothari et al. (2005) model to calculate discretionary accruals. The OLS estimation technique was employed to empirically analyze the effect of firm leverage on earning management practices. Consistent with the ‘control hypothesis’ for debt creation, we find that a significant negative association between leverage and earnings management for Nigerian firms. The empirical results show that leverage limits earning manipulating activities of managers.

Item Type: Article
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 22 Aug 2022 10:59
Last Modified: 22 Aug 2022 10:59

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