Earnings Management, Audit Quality and Financial Performance of Quoted Petroleum Marketing Industries in Nigeria

  • AbdulRahman Bala Sani Usmanu Danfodiyo University, Sokoto
  • Abdulasallam Kaoje Nasir Usmanu Danfodiyo University, Sokoto
  • Musbahu Bunza Ahmad Usmanu Danfodiyo University, Sokoto
  • Taophic Olarewaju Bakare Usmanu Danfodiyo University, Sokoto
Keywords: Earnings Management, Audit Quality, Financial Performance JEL Classification Codes: M41, M42, M39


This research looks at the effects of revenue management, audit quality on financial performance of publicly listed Nigerian petroleum marketing firms.  Data for the years 2010 to 2020 were taken out of the sampled companies' annual reports. Results from the GMM estimator showed that the audit committee's financial expertise and independent auditors have a significant impact on return on assets, and p-values at the 5% level of significance, respectively, while discretionary accrual had an insignificant impact on return on assets. The study concluded that the lack of significance of discretionary accrual in the possibility of receiving a qualified audit report could not indicate that auditors are unaware of earnings management, but rather that they are much more concerned about it when these decisions lead to inflated rather than understated earnings. In order to reduce the detrimental impact of earnings management on the financial performance of listed petroleum marketing businesses in Nigeria, the study advises that suitable mechanisms for the fast detection of earnings management techniques be implemented.

Author Biographies

AbdulRahman Bala Sani, Usmanu Danfodiyo University, Sokoto

Department of Accounting,

Abdulasallam Kaoje Nasir, Usmanu Danfodiyo University, Sokoto

Department of Accounting,

Musbahu Bunza Ahmad, Usmanu Danfodiyo University, Sokoto

Department of Accounting,

Taophic Olarewaju Bakare, Usmanu Danfodiyo University, Sokoto

Department of Accounting,