A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria

Obi Chineze Eunice

doi:doi:10.11648/j.jim.20211001.12

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A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria

Obi Chineze Eunice

Published in Journal of Investment and Management (Volume 10, Issue 1)

Received: 23 September 2020 Accepted: 17 November 2020 Published: 16 April 2021

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Abstract

The paper examined the accounting quality in the financial statement, concerning earnings management practices by managers. The financial statements provide critical information that is useful to various groups, investors, standard setters, shareholders and government. The practices of various methods of earnings management are classified into accounting-based and market- based earnings management. The study classified the earnings management techniques in various ways that affect the quality of financial statements in the pre and post-IFRS adoption. The introduction of IFRS and its accompanying standards in the area of earnings management might imply real improvements in the financial statements about the quality. The earnings management techniques include the following: earnings management towards a target, earnings smoothing, discretionary accruals, accruals quality, and timely loss recognition as against other proxies of accounting quality. These are opportunities managers have to get quality Financial Statements that accomplish their intentions. The essence is that they use them to achieve their objectives either getting the desired level of profit or not recording losses for the business. The review results are that in the pre-IFRS the earnings management in use was the accrual-based earnings technique in which managers adjust assumptions and estimates the accounting system. In the post-IFRS, managers revert to real transactions based earnings management which involves the timing and structuring actual business activities to achieve a desired financial reporting result (for example, the timing of the sale of equipment that will result in a gain in a quarter in which extra earnings are needed, delaying major repairs, advertising, research, and development expenses write–off, and foregoing capital projects that positive net present value).

Published in	Journal of Investment and Management (Volume 10, Issue 1)
DOI	10.11648/j.jim.20211001.12
Page(s)	8-12
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Revenue, Earnings, Management, Government, Nigeria

References

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Obi Chineze Eunice. (2021). A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. Journal of Investment and Management, 10(1), 8-12. https://doi.org/10.11648/j.jim.20211001.12

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ACS Style

Obi Chineze Eunice. A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. J. Invest. Manag. 2021, 10(1), 8-12. doi: 10.11648/j.jim.20211001.12

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AMA Style

Obi Chineze Eunice. A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. J Invest Manag. 2021;10(1):8-12. doi: 10.11648/j.jim.20211001.12

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@article{10.11648/j.jim.20211001.12,
  author = {Obi Chineze Eunice},
  title = {A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria},
  journal = {Journal of Investment and Management},
  volume = {10},
  number = {1},
  pages = {8-12},
  doi = {10.11648/j.jim.20211001.12},
  url = {https://doi.org/10.11648/j.jim.20211001.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20211001.12},
  abstract = {The paper examined the accounting quality in the financial statement, concerning earnings management practices by managers. The financial statements provide critical information that is useful to various groups, investors, standard setters, shareholders and government. The practices of various methods of earnings management are classified into accounting-based and market- based earnings management. The study classified the earnings management techniques in various ways that affect the quality of financial statements in the pre and post-IFRS adoption. The introduction of IFRS and its accompanying standards in the area of earnings management might imply real improvements in the financial statements about the quality. The earnings management techniques include the following: earnings management towards a target, earnings smoothing, discretionary accruals, accruals quality, and timely loss recognition as against other proxies of accounting quality. These are opportunities managers have to get quality Financial Statements that accomplish their intentions. The essence is that they use them to achieve their objectives either getting the desired level of profit or not recording losses for the business. The review results are that in the pre-IFRS the earnings management in use was the accrual-based earnings technique in which managers adjust assumptions and estimates the accounting system. In the post-IFRS, managers revert to real transactions based earnings management which involves the timing and structuring actual business activities to achieve a desired financial reporting result (for example, the timing of the sale of equipment that will result in a gain in a quarter in which extra earnings are needed, delaying major repairs, advertising, research, and development expenses write–off, and foregoing capital projects that positive net present value).},
 year = {2021}
}

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TY  - JOUR
T1  - A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria
AU  - Obi Chineze Eunice
Y1  - 2021/04/16
PY  - 2021
N1  - https://doi.org/10.11648/j.jim.20211001.12
DO  - 10.11648/j.jim.20211001.12
T2  - Journal of Investment and Management
JF  - Journal of Investment and Management
JO  - Journal of Investment and Management
SP  - 8
EP  - 12
PB  - Science Publishing Group
SN  - 2328-7721
UR  - https://doi.org/10.11648/j.jim.20211001.12
AB  - The paper examined the accounting quality in the financial statement, concerning earnings management practices by managers. The financial statements provide critical information that is useful to various groups, investors, standard setters, shareholders and government. The practices of various methods of earnings management are classified into accounting-based and market- based earnings management. The study classified the earnings management techniques in various ways that affect the quality of financial statements in the pre and post-IFRS adoption. The introduction of IFRS and its accompanying standards in the area of earnings management might imply real improvements in the financial statements about the quality. The earnings management techniques include the following: earnings management towards a target, earnings smoothing, discretionary accruals, accruals quality, and timely loss recognition as against other proxies of accounting quality. These are opportunities managers have to get quality Financial Statements that accomplish their intentions. The essence is that they use them to achieve their objectives either getting the desired level of profit or not recording losses for the business. The review results are that in the pre-IFRS the earnings management in use was the accrual-based earnings technique in which managers adjust assumptions and estimates the accounting system. In the post-IFRS, managers revert to real transactions based earnings management which involves the timing and structuring actual business activities to achieve a desired financial reporting result (for example, the timing of the sale of equipment that will result in a gain in a quarter in which extra earnings are needed, delaying major repairs, advertising, research, and development expenses write–off, and foregoing capital projects that positive net present value).
VL  - 10
IS  - 1
ER  -

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Author Information

Obi Chineze Eunice

Department of Accountancy, Faculty of Management Science University of Nigeria, Nsukka, Nigeria

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Plain Text BibTeX RIS

APA Style

Obi Chineze Eunice. (2021). A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. Journal of Investment and Management, 10(1), 8-12. https://doi.org/10.11648/j.jim.20211001.12

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ACS Style

Obi Chineze Eunice. A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. J. Invest. Manag. 2021, 10(1), 8-12. doi: 10.11648/j.jim.20211001.12

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AMA Style

Obi Chineze Eunice. A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria. J Invest Manag. 2021;10(1):8-12. doi: 10.11648/j.jim.20211001.12

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@article{10.11648/j.jim.20211001.12,
  author = {Obi Chineze Eunice},
  title = {A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria},
  journal = {Journal of Investment and Management},
  volume = {10},
  number = {1},
  pages = {8-12},
  doi = {10.11648/j.jim.20211001.12},
  url = {https://doi.org/10.11648/j.jim.20211001.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20211001.12},
  abstract = {The paper examined the accounting quality in the financial statement, concerning earnings management practices by managers. The financial statements provide critical information that is useful to various groups, investors, standard setters, shareholders and government. The practices of various methods of earnings management are classified into accounting-based and market- based earnings management. The study classified the earnings management techniques in various ways that affect the quality of financial statements in the pre and post-IFRS adoption. The introduction of IFRS and its accompanying standards in the area of earnings management might imply real improvements in the financial statements about the quality. The earnings management techniques include the following: earnings management towards a target, earnings smoothing, discretionary accruals, accruals quality, and timely loss recognition as against other proxies of accounting quality. These are opportunities managers have to get quality Financial Statements that accomplish their intentions. The essence is that they use them to achieve their objectives either getting the desired level of profit or not recording losses for the business. The review results are that in the pre-IFRS the earnings management in use was the accrual-based earnings technique in which managers adjust assumptions and estimates the accounting system. In the post-IFRS, managers revert to real transactions based earnings management which involves the timing and structuring actual business activities to achieve a desired financial reporting result (for example, the timing of the sale of equipment that will result in a gain in a quarter in which extra earnings are needed, delaying major repairs, advertising, research, and development expenses write–off, and foregoing capital projects that positive net present value).},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - A Review of Management Earning and Real Transaction Manipulations Pre and Post IFRS Adoption in Nigeria
AU  - Obi Chineze Eunice
Y1  - 2021/04/16
PY  - 2021
N1  - https://doi.org/10.11648/j.jim.20211001.12
DO  - 10.11648/j.jim.20211001.12
T2  - Journal of Investment and Management
JF  - Journal of Investment and Management
JO  - Journal of Investment and Management
SP  - 8
EP  - 12
PB  - Science Publishing Group
SN  - 2328-7721
UR  - https://doi.org/10.11648/j.jim.20211001.12
AB  - The paper examined the accounting quality in the financial statement, concerning earnings management practices by managers. The financial statements provide critical information that is useful to various groups, investors, standard setters, shareholders and government. The practices of various methods of earnings management are classified into accounting-based and market- based earnings management. The study classified the earnings management techniques in various ways that affect the quality of financial statements in the pre and post-IFRS adoption. The introduction of IFRS and its accompanying standards in the area of earnings management might imply real improvements in the financial statements about the quality. The earnings management techniques include the following: earnings management towards a target, earnings smoothing, discretionary accruals, accruals quality, and timely loss recognition as against other proxies of accounting quality. These are opportunities managers have to get quality Financial Statements that accomplish their intentions. The essence is that they use them to achieve their objectives either getting the desired level of profit or not recording losses for the business. The review results are that in the pre-IFRS the earnings management in use was the accrual-based earnings technique in which managers adjust assumptions and estimates the accounting system. In the post-IFRS, managers revert to real transactions based earnings management which involves the timing and structuring actual business activities to achieve a desired financial reporting result (for example, the timing of the sale of equipment that will result in a gain in a quarter in which extra earnings are needed, delaying major repairs, advertising, research, and development expenses write–off, and foregoing capital projects that positive net present value).
VL  - 10
IS  - 1
ER  -

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