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Income smoothing and performances of enterprises: A study of manufacturing firms in Nigeria

Author

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  • Sani Alfred Ilemona

    (Department of Accounting, Federal University Kashere. Gombe State, Nigeria)

Abstract

The study examined income smoothing and performance of enterprises: A study of manufacturing firms in Nigeria. The objective is to determine whether income smoothing has relationship with performance of businesses taking a study of manufacturing firms in Nigeria. Using purposively sampling, technique data for five years (2017-2021) on Market Value Per Share (MVPS), Earnings Per Share (EPS), Net Assets Value Per Share (MVPS), Earnings Per Share (EPS), Net and Income (NI) were obtained from the annual reports of selected 20 manufacturing firms quoted on Nigerian Stock Exchange (NSE) as at 31st December, 2021. The analysis of the data was done using correlation and regression methods. Further, F-test statistics was done to compare variance obtained from the grouped sample. It was found that relationship exist between income smoothing and performance of manufacturing business, it was also found that firms in the high sales bracket presents less variable income numbers in their financial statements implying smoothed income than those manufacturing enterprises in the low sales bracket. The study recommends engagement of qualified and skilled auditors to investors for proper analysis of financial statements of enterprises for identification of smoothed income in the financial statements which in some cases are done fraudulently.

Suggested Citation

  • Sani Alfred Ilemona, "undated". "Income smoothing and performances of enterprises: A study of manufacturing firms in Nigeria," Review of Socio - Economic Perspectives 202222, Reviewsep.
    • Handle: RePEc:aly:journl:202222
    DOI: https://doi.org/10.19275/RSEP143
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    References listed on IDEAS

    as
    1. Katarina Valaskova & Tomas Kliestik & Maria Kovacova, 2018. "Management of financial risks in Slovak enterprises using regression analysis," Oeconomia Copernicana, Institute of Economic Research, vol. 9(1), pages 105-121, March.
    2. Nancy L. Stokey, 1991. "Human Capital, Product Quality, and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 587-616.
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    More about this item

    Keywords

    income; smoothed; performance; businesses; financial statement.;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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