EARNINGS MANAGEMENT AND FINANCIAL REPORTING QUALITY OF LISTED INSURANCE COMPANIES IN NIGERIA.

Abstract

This study examined earnings management and financial reporting quality of listed insurance companies in Nigeria. The study was guided by seven specific objectives, seven research questions and seven research hypothesis. The population of the study was 25 listed insurance companies in Nigeria, the sample size was 21, and the study employed ex-post facto research design. The data used in the study was secondary data and it was sourced from annual reports and statement of accounts of the selected firms between 2013 and 2019. The method of data analysis was descriptive statistics, unit root test, diagnostic tests, Hausman Test and Panel Least Square (PLS) regression technique with the help of E-view 12, while the Moderated Multiple Regression (MMR) techniques were used for the purpose of moderating variable analysis with the help of SPSS. The result revealed that there is a positive and significant relationship between accrual earnings and faithful representation of insurance companies in Nigeria. There is insignificant relationship between income smoothness and faithful representation of listed insurance companies in Nigeria. There is insignificant relationship between earnings persistence and faithful representation of listed insurance companies in Nigeria. There is a significant relationship between accrual earnings and the relevance of listed insurance companies in Nigeria. Based on the findings, recommendations were made as follow; Insurance companies in Nigeria's accrual earnings are positive and significantly related. Thus, management should maintain this level of accrual earnings management, insurance companies should reduce the rate of income smoothness to enhance the credibility and financial reports quality, and the insurance sector should monitor the compliance with the provisions of the Nigerian code of corporate governance by companies. This will help strengthen the faithful representation of financial reports.