Asian Journal of Economics, Business and Accounting

The increasing rate of business failure in Nigeria shortly after posting impressive results has raised the issue of earnings management to the forefront. This study examined the relationship between diverse performance measurements and earnings management in quoted manufacturing companies in Nigeria. Twenty seven firms quoted on the Nigerian Stock Exchange (NSE) were through purposive sampling selected for the study. Financial statements for 2008 – 2015 were used as secondary data while a questionnaire was administered on both the consumers of the products and staff of the sampled companies. The hypotheses were tested using Ordinary Least Squares (OLS) regression analysis. Findings from the study suggested that the impact of financial performance measures on earnings management is negatively significant while the relationship between non-financial performance measures and earnings management is positively non-significant. It was revealed that the combined influence of financial and non-financial performance measures on earnings management in quoted manufacturing companies in Nigeria is 35.5%. It was concluded that firms were only concerned about financial performance measures to engage in earnings management. It was recommended that investors and analysts should pay close attention to financial performance measures of manufacturing firms. Regulatory authorities such as Financial Reporting Council of Nigeria (FRCN) should intensify efforts at ensuring that firms do not manage earnings to look impressive in order to obtain loans. Government should create conducive environment for companies to operate maximally to avoid earnings management.