Implications of Earning Management on Performance Measuring Firms in Nigeria

This study examined the relationship that subsists between diverse performance measurements and earnings management in quoted manufacturing companies in Nigeria. This is premise on failure of businesses shortly after declaring impressive results which has raised the concern of investors and other users of financial reports. Twenty seven (27) firms quoted on the floor of the Nigerian Stock Exchange (NSE) were purposively drawn for the study using their financial statements from 2008- 2015 and a questionnaire designed for the study administered to both customers and staff of the select companies. Data collected were analyzed using Ordinary Least Square (OLS) regression analysis. Results show significant negative relationship between the dependent and variable financial performance measures as against positive relationship for non-financial performance measures. The combined influence of both measures is 35.5%. It was concluded that users of financial reports should use both financial and non-financial performance measures to evaluate companies and that financial and regulatory authorities should intensify efforts at ensuring that firms do not manage earnings.