Influence of Board Political Connection on Earnings Management among Quoted Manufacturing Companies in Nigeria

Abstract

Purpose- This study examined the influence board political connection on earnings management among quoted manufacturing companies in Nigeria.

Method-This study was an expost-facto type of research and covered time frame of 5 years from 2015 to 2019. A total of 47 manufacturing companies constituted the sample size. Data used were obtained from financial statements of the sampled manufacturing companies. Statistical tool used include descriptive statistic, correlation and regression. In calculating earnings management, Jones model was applied for nondiscretionary accruals in the event year.

Findings-The study revealed that board political connection has significant influence and positive relationship with earnings management among quoted firms in Nigeria.

Contribution-The study contributed to knowledge by applying Jones model in calculating nondiscretionary accruals in the event year and establish that companies whose board members are politically connected should not downplay accounting practices and reporting standards that are applicable and eschew from any form of deceptive activities that will be detrimental to the going concern of their organizations.

Keywords: Earnings Management, Discretionary accrual and Board Political Connection