Effect of Audit Client Importance on Earnings Management of Nigerian Quoted Consumer Goods Firms

The primary focus of this study was to determine the effect of audit client importance on earnings management of Nigerian quoted consumer goods firms. The descriptive research design approach was adopted. From ۲۰۱۲ to ۲۰۱۹, data were obtained from ۱۳ consumer goods firms quoted on the Nigerian Exchange Group. The discretionary accrual approach was used to evaluate earnings management. Descriptive statistics and random effects regression were the main techniques used to analyse the study’s data. The findings indicated that audit client importance (β=-۰.۱۸۷۲) has a negative and significant effect on the earnings management of Nigerian quoted consumer goods firms. The study concluded that earnings management practices of Nigerian quoted consumer goods firms are curtailed when the firms are of important clients to their auditors. The recommendation was that management of firms should enhance approaches that will improve their performance in terms of sales to remain important clients to their auditors.

Keywords:

Audit , audit client importance , Earnings Management