Firm Characteristics and Discretionary Cash Flow in Listed Oil and Gas Firms in Nigeria
Year: 2024
Type: article
Abstract: The increasing prevalence of earnings management in Nigerian companies indicates that thispractice is quickly becoming a significant issue for stakeholders. Discrepancies in accounting dataare concerning, and the poor quality of financial reporting and accounting data is leading togrowing doubts about the accuracy and usefulness of the information provided in financial reports.Consequently, this study focused on the relationship between firm characteristics anddiscretionary cash flow in listed oil and gas firms in Nigeria. A longitudinal research approachwas employed on a population comprising of the 12 oil and gas companies that were listed as ofthe last quarter of 2021 on the Nigerian Exchange Group (NGX). The study adopted secondarydata from the 2002–2021 annual reports of oil and gas companies listed on the Nigerian ExchangeGroup while the Pooled Ordinary Least Square (OLS) regression analysis was deployed as themethod of data analysis. The findings revealed that discretionary cash flow and the firmcharacteristics of oil and gas firms have a negative significant relationship. Based on the abovefindings, this study concluded that an abundance of operating cash flow lessens the propensity toparticipate in earnings management. The study therefore recommended that companies listed onthe Nigerian Exchange Group (NGX) should abide by the governance reforms already in place inthe nation, such as sufficient assessment, investigation, and scrutiny of the company's financialstatement and sufficient protocols for the early identification of earnings management practices.
Authors: Christopher Akinwale Da-Silva, Alexander Tunde OGUNTUASE, Chris Chigo Uchehara, Godwin Emmanuel Oyedokun, Jayeola OLABISI
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7019308142
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