EFFECT OF FIRM’S CHARACTERISTICS ON EARNINGS MANAGEMENT OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

This study examines the effect of firm characteristics on earnings management of listed Deposit Money Banks (DMBs) in Nigeria. The population of the study consists of all 14 listed DMBs, from which a sample of 10 banks was selected using purposive sampling technique based on the availability of complete financial reports from 2014–2023. The study adopted an ex-post facto research design, which is appropriate because it utilizes historical financial data without manipulating the variables. Secondary data were collected from annual reports and financial statements of the sampled banks. Panel regression analysis was employed to assess the effect of firm size, leverage, profitability, and audit committee independence on earnings management. The findings reveal that firm size, leverage, and audit committee independence have no significant effect on earnings management, while profitability shows a significant negative relationship with earnings manipulation. This indicates that more profitable banks are less likely to engage in earnings management practices. Based on these findings, the study recommends that deposit money banks strengthen profitability-enhancing strategies and maintain stable earnings structures, as improved profitability reduces managers’ incentives for earnings manipulation and promotes more credible financial reporting.