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Effective Tax Rate, Book –Tax Difference and Real Earnings Management: Evidence from Listed Companies in Nigeria

Onyedikachi, Gift, John Uzodinma Ihendinihu, Chinedum Ephraim Nwadighoha

Abstract

The study focused on tax effective tax rate, book-tax difference and real earnings management of listed companies in Nigeria. To achieve the objective of the study, ex-post facto research design was adopted. The data were collected from annual report and accounts of the selected firms in Nigeria from 2016 to 2025. The population of the study comprised of all the 150 companies listed in Nigeria exchange group as at 2025. The sample size was derived using both purposive sampling and stratified sampling techniques and 45 listed firms were purposively selected. The data collected were analyzed using Panel GMM analysis. From the findings, the study concluded that, effective tax rate, and book-tax difference have significant effect on real earnings management of listed companies in Nigeria. The study recommends that, companies should adopt ethical tax planning strategies to avoid using tax burden adjustments as a means of manipulating real business activities for earnings management purposes. Also, the government and regulatory agencies, should strengthen policies aimed at reducing excessive book-tax differences to improve financial reporting quality and curb real earnings management.

Keywords

effective tax ratebook –tax difference and real earnings management

References

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