The Effect of Audit Quality on Accruals Earnings Management in Nigerian Listed Firms 
Umar Aliyu Mustapha1, Norfadzilah Rashid2, Abdullahi Bala Ado3, Lateef Saheed Ademola4
1Umar Aliyu Mustapha Faculty of Business and Management Sciences, University Sultan Zainal Abidin (UniSZA),Terengganu, Malaysia.
2Norfadzilah Nik Mohd Rashid Faculty of Business and Management Sciences, University Sultan Zainal Abidin (UniSZA),Terengganu, Malaysia.
3Abdullahi Bala Ado Faculty of Business and Management Sciences, University Sultan Zainal Abidin (UniSZA),Terengganu, Malaysia.
4Saheed Ademola Lateef Faculty of Business and Management Sciences, University Sultan Zainal Abidin (UniSZA),Terengganu, Malaysia.
Manuscript received on November 12, 2019. | Revised Manuscript received on November 25, 2019. | Manuscript published on 30 November, 2019. | PP: 4894-4897 | Volume-8 Issue-4, November 2019. | Retrieval Number: D8369118419/2019©BEIESP | DOI: 10.35940/ijrte.D8369.118419
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Earnings manipulation studies are of utmost importance to both the shareholders and stakeholders because of its effect in investment and management decisions. The practices are directly affecting the quality of financial reporting and increase information asymmetry between the management and shareholders. Thus, Audit Quality is one of the tool academicians use in measuring the level of earning practices in the organizations. However, this study investigated the possible effect of audit quality towards the change of earnings management level among the Nigerian listed firms. The study used all the public listed firms in the main flow of the Nigerian Stock Exchange (NSE) as a population from the year 2012 until 2017. Sixty-three selected companies were selected as a sample based on the filtration criteria of the study. The financial data was obtained from the Thompson Reuters DataStream, and the corporate governance data was from the annual reports and accounts of the companies. Audit quality and accrual model was used to test the relationship between the study variable. The study applied multiple regression to test the model. It was revealed from the regression that audit quality is negatively significant with accrual earnings management. This finding is indicating that any increases in the unit of audit fees will decrease the earnings management of the selected firms. Thus, the finding is supporting agency theory and is contrary to the assumption of creative accounting theory. The result of this study will assist the relevant authorities in decision making and policy setting towards the best practices of the Nigerian listed firms.
Keywords: Audit Quality; Accruals Earnings Management; Nigerian Listed Firms.
Scope of the Article: Disaster Management.