EARNINGS MANAGEMENT AND SUSTAINABILITY REPORTING OF LISTED NON-FINANCIAL FIRMS IN NIGERIA: DOES EARNINGS MANAGEMENT DRIVE THIS REPORT

Abstract

There has been growing demand by significant stakeholders for trustworthy information on the economic, social, environmental, and governance activities of firms. Although, management who are responsible for preparing this sustainability reporting has been faulted for selfinterest acts and opportunities behaviors. Because of this, this study evaluates the effect of earnings management on sustainability reporting of listed nonfinancial firms in Nigeria from 2011 to 2018. The sample of the study comprised of 24 firms and sustainability reporting was measured using content analyses on the corporate annual report on sustainability used Global Reporting Initiatives (G4) guidelines, while the earnings management variable was derived from the Modified Jones Model by Dechow, Sloan & Sweeny (1995) for discretionary accrual. A correlational design was employed; Secondary data was obtained from the annual reports of the firms. The results from the fixed effect regression analysis proved that the extent of earnings management drives the level of sustainability reporting positively. The study concludes that firms that manage their earnings are likely to report more on sustainability