DOES EARNINGS MANAGEMENT PRACTICE AFFECT THE PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA?

The study investigated the effect of earnings management practices on the financial performance of listed consumer goods firms in Nigeria. The study adopted ex-post-facto design to collect data for the study on the events already in existence. The purposive sampling technique was employed to select 10 firms out of 21 listed firms contingent on the availability of data. The study generated secondary data, over a period of eleven years 2008-2018, from the audited financial reports of sampled firms. The data were analyzed using descriptive and inferential statistics coupled with multiple regressions. In the model, Return on Asset (ROA) was used to measure financial performance while Earnings per Share (EPS), Operating Cash Flow (OCF), and Firm Size (FSIZE) were surrogates for earnings management. The study showed a significant and positive influence of EPS on ROA (p-value <0.05); also, a significant and negative effect of FSIZE on ROA (p-value < 0.05). However, there was an insignificant and a positive influence of OCF on ROA (p-value < 0.05). The study suggested a significant contribution of earnings management to the performance of consumer goods firms in Nigeria. Hence, it is recommended that auditors should ensure a transparent and audit quality to protect investors' interests. In addition, investors should exercise restraints in placing much reliance on earnings per share and firm size while making vital investment decisions.