AUDIT FIRM SIZE AND EARNINGS MANAGEMENT OF LISTED INTERNATIONAL LICENSED COMMERCIAL BANKS IN NIGERIA

Abstract

The study examined audit firm size and earnings management of listed international licensed commercial banks in Nigeria. The specific objectives were to; Evaluate the relationship between big audit firm and discretionary accruals of listed international licensed commercial banks in Nigeria, examine relationship between small audit firm and discretionary accruals of listed international licensed commercial banks in Nigeria, Ascertain the relationship between big audit firm and discretionary provisions for loan loss of listed international licensed commercial banks in Nigeria, examine the relationship between small audit firm and discretionary provisions for loan loss of listed international licensed commercial banks in Nigeria. This study adopted ex-post facto research design. The population and sample size of the study is the eight (8) listed commercial banks with international license in Nigeria stock exchange as at December 31^st 2021. Secondary data was used as instrument. The formulated research questions were analyzed with descriptive statistics. The hypotheses were tested using the multiple regression analysis with the aid of E-view version 10. The study concludes that, there is significant the relationship between big audit firm and discretionary accruals in listed international licensed commercial banks in Nigeria. There is no significant relationship between small audit firm and discretionary accruals in listed international licensed commercial banks in Nigeria. There is significant the relationship between independence and discretionary provision for loan loss in listed international licensed commercial banks in Nigeria. There is no significant the relationship between financial expertise and discretionary provision for loan loss in listed international licensed commercial banks in Nigeria. The study recommends that international licensed commercial banks in Nigeria audit firm size and discretionary accruals are positive and significantly related. Thus, management should maintain this level of audit firm size. Shareholders and investors and other stakeholders of international licenced banks, should advocate for audit tenure of five years, more professional application of audit expertise, technology, contributions, and auditor independence to earnings managements.