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

Abstract

The study examined earnings management and financial reporting quality of listed insurance
companies in Nigeria. The specific objectives are; to examine the relationship between accrual
earnings and faithful representation of listed insurance companies in Nigeria, investigate the
relationship between earnings persistence and faithful representation of listed insurance
companies in Nigeria, ascertain the relationship between accrual earnings and relevance of listed
insurance companies in Nigeria. The expo facto designs. The population of the study was the
twenty-five (25) listed insurance companies in the Nigerian Stock Exchange during the period 2013
-2019 (7) years. The sample size of this study is twenty-one (21). This number is derived by the
application or use of Taro Yamane formula for sample size determination. Out of the twenty-four
(24) companies, three (3) companies have incomplete financial statements which leave the sample
size to be twenty-one (21) listed insurance companies. The study employed the use of secondary
data. The formulated research questions were analyzed with descriptive statistics. The hypotheses
were tested using the simple regression analysis with the aid of E-view (10). The findings of the
study were that there is significant relationship between accrual earnings and faithful
representation of insurance companies in Nigeria. there is insignificant relationship between
earnings persistence and faithful representation of listed insurance companies in Nigeria and there
is significant relationship between accrual earnings and relevance of listed insurance companies in
Nigeria. The study recommended among others that insurance companies in Nigeria's accrual
earnings are positive and significantly related. Thus, management should maintain this level of
accrual earnings management. 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. To make reliable investment decisions by
management and other investors, insurance companies should maintain the level of accruals
earnings to enhance the quality of financial reports.