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Audit Quality and Cash – Based Earnings Management of Quoted Companies in Nigeria

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  • Augustine Oke Okolie
  • Famous O. I. Izedonmi
  • Augustine O. Enofe

Abstract

This study examines the impact and relationship between audit quality and cash - based earnings management of companies in Nigeria. Using archival data based on a sample of 342 companies – year observations from the NSE and applying some commonly applied audit quality measures for purpose of robustness, a massive and all-inclusive multivariate analyses was conducted. The result showed that audit quality exerts significant negative relationship with cash - based earnings management of quoted companies in Nigeria. The study recommends that Professional Accountancy Bodies, the Financial Reporting Council of Nigeria and the Nigerian National Assembly should issue authoritative code for audit quality; companies should improve their earnings quality only through sales growth, cost control and cost reduction strategies; companies in Nigeria should present distinct statements of earnings quality while auditors should issue Integrated Audit Quality Assurance Report based on earnings quality assessment, supported by current best practices, statutorily backed by earnings monitoring of companies in Nigeria.

Suggested Citation

  • Augustine Oke Okolie & Famous O. I. Izedonmi & Augustine O. Enofe, 2014. "Audit Quality and Cash – Based Earnings Management of Quoted Companies in Nigeria," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 3(1), pages 1-4.
    • Handle: RePEc:spt:fininv:v:3:y:2014:i:1:f:3_1_4
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    Cited by:

    1. Yazan Oroud & Md. Aminul Islam & Tunku Salha Tunku Ahmad & Anas Ghazalat, 2019. "Does Audit Quality Moderate the Relationship between Accounting Information and the Share Price? Evidence from Jordan," International Business Research, Canadian Center of Science and Education, vol. 12(3), pages 58-65, March.

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