Earnings Management and Market Value of Listed Deposit Money Banks in Nigeria

Abstract

This paper explores the effectiveness of earnings management (EM) in determining the market value of the Nigerian listed Deposit Money Banks. Out of the fourteen institutions, twelve institutions were sampled to be analyzed, and data were taken from their annual reports from 2014 to 2024. Utilizing the descriptive statistics and panel regression, it became possible to find that accrual EM  has an inverse  influence on the Tobin Q (t-value = -2.1875, p < 0.05). The results indicate that investors are sensitive to earnings manipulation, and this, in effect ,reduces the value of firms in the market environment. The conclusion shows that there is an unhealthy relationship between EM  practices and market value. In its recommendations, the study suggests that the management and other stakeholders employ the accrual-based EM  practices that help to increase the transparency and informativeness of the financial reporting to strengthen the confidence of investors and the overall firm value