Earnings management in emerging economy: what is the mitigating role of adopting IFRS?

Earnings management, a global concern with detrimental impacts on firms and stakeholders, has prompted extensive academic inquiry. This study investigates the influence of corporate governance mechanisms and the adoption of International Financial Reporting Standards (IFRS) on earnings management among Nigerian manufacturing firms. Using a balanced panel of 668 firm-year observations from 52 listed companies between 2007 and 2022, the research employs fixed and random effects models alongside Two Sample t-tests. The findings indicate significant differences in earnings management pre- and post-IFRS adoption, with independent board size and audit committee composition significantly affecting earnings management. The study concludes that IFRS adoption and corporate governance mechanisms play crucial roles in moderating earnings management.