EARNINGS MANAGEMENT AND TIMELINESS OF FINANCIAL REPORTS AMONG LISTED NIGERIAN FINANCIAL SERVICES FIRMS

Abstract

Earnings management can cause delays in the timely presentation of financial reports, as management may wait for last-minute opportunities to manipulate earnings before closing their accounts. Therefore, this study examines the relationship between earnings management and the timeliness of financial reports for listed Nigerian financial services firms. This research adopts discretionary accruals (DA), real earnings management (REM), and cash flow management as common earnings management practices, while timeliness is proxied by audit report lag. An ex post facto research design was utilized. The population for this study consists of 43 firms, and a purposive sampling technique was employed to select 20 listed financial service firms. Data were obtained from secondary sources over a 10-year period, spanning 2014-2023. Findings revealed, among other things, that discretionary accruals and real earnings management have a significant negative and positive relationship with audit report lag, respectively. The study concludes that firm managers who engage in discretionary accruals are likely to improve the timeliness of their financial reports, whereas production-based real earnings management may ultimately lead to delays in publishing financial reports. Therefore, the study recommends that firm managers continue to adopt the discretionary accrual method to enhance the timeliness of their financial reports.