EARNINGS QUALITY AND FINANCIAL BEHAVIOUR IN NIGERIA

Abstract

The study examined the effect of earnings quality on financial behaviour of deposit money banks (DMBs) in Nigeria. The study used data extracted from the financial statements of listed DMBs in Nigeria for the period 2008 to 2017. The study also employed panel data multiple regression technique. The result found that earnings quality has a positive and significant effect on cash balance of deposit money banks. The study concluded that earnings quality have positive and significant effect on financial behaviour of deposit money banks. In line with the conclusion, the study recommended that the management of deposit money banks should deploy flexible approach in form of window service to enable them respond quickly to profit making opportunities. This will increase their profitability and discourage them from engaging in any form of opportunistic behaviour, manipulative accounting tendencies and tempering with the credibility of the financial statement.