Effect of accrual-based earnings management on the firm value of listed industrial goods companies in Nigeria

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Purpose: The study investigated the effect of accrual-based earnings management on the firm value of listed industrial goods companies in Nigeria. Methodology: The study employed an ex-post facto research design, and secondary data were obtained from a sample of 12 listed industrial goods companies between 2012 and 2023. The descriptive statistics and regression techniques were used for data analysis with the aid of STATA version 16.0. Results and conclusion: The study found that accrual-based earnings management significantly reduced the firm value measured by Tobin’s Q. The study concluded that the effect of accrual-based earnings management on firm value in Nigeria is firm-specific, and the negative relationship views it as value-destroying. Implication of findings: The study recommended that regulatory authorities should toughen supervision and enforcement of financial reporting standards, while managers of companies, especially the listed industrial goods companies, should heighten corporate governance practices, mostly audit quality and board oversight, to mitigate earnings manipulation. Furthermore, investors should place greater emphasis on the quality of earnings rather than reported profits when making investment decisions.