Abstract

This research study investigated the effect of accrual-based earnings management on the financial performance of manufacturing companies in Nigeria. The research cut across all listed manufacturing subsectors in Nigeria. Thus, the sample consisted of thirty four manufacturing companies listed on the Nigeria Exchange. Period covered was fifteen years – from 2005 to 2019. Data was collected from the annual reports concerned companies and the Nigeria Exchange data portal. The ordinary least square method of analysis was adopted. Thus, in addition to the multiple regression method, Augmented Dickey-Fuller unit root diagnostic method was implemented. From the data analyses, the following results were obtained: Results of data analyses showed that there was a negative and non-significant relationship between DACC and NPMG; However, DACC had a positive and non-significant relationship with EPSH. The study thus concluded that: DACC leads to deterioration in NPMG but enhances EPSH. However, the effects of DACC on financial performance is not sufficient to support the use of these earnings management methods. It was thus recommended among other things that: that managers are discouraged from embarking on earnings management practices for personal gain; Even where earnings management is embarked for benefit of the organization, managers should ensure that they can adequately guarantee the end result to be achieved before embarking on the practice.