Do Banks in Nigeria Manage Earnings through Loan Loss Provisions?

摘要

The financial reporting scandals that was recorded in Enron, Cadbury Nigeria and some banks like Oceanic bank, International bank and Afribank has prompted researchers and regulators to investigate the incidence of earnings management in Nigeria and abroad.The main objective of this study is to investigate whether banks in Nigeria manage their earnings through the use of loan loss provisions.Data was collected from the fact book of The Nigerian Stock Exchange and published financial statements of 11 banks. The study used a one sample T-Test, Descriptive statistics and pooled linear regression model which was estimated using an ordinary least squares procedure and employing Statistical Package for Social Science Programme to analyse the data collected. The result reveals that earnings management management through the use of loan loss provision is present in Nigeria banks. The study recommends that regulatory agencies responsible for meintaining finanicial reporting quality like the SEC, CBN and FRC should device a means of monitoring financial statements of reporting organisations (banks in particular) quaterly. Key w ords: Audit Committee, Financial Expert, Earnings Management, Banks, Nigeria