Tax Aggressiveness and Earnings Management: Evidence from Listed Commercial Banks in Nigeria

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This study examined the extents to which tax aggressiveness affects earnings management of listed commercial banks in Nigeria. Ex-post facto research design and panel data was obtained for twelve (12) listed commercial banks from 2014-2023. Tax aggressiveness was measured using cash effective rate while two earnings management models were employed namely, Chang and Jones models. Data collected were analyzed through descriptive, post-estimation and inferential statistical techniques. The fixed and random effects regression models showed that tax aggressiveness significantly affects earnings management models. In view of the findings, it recommends the needs for management of listed commercial banks to dampen earnings management practices since it is negatively influenced by the level of tax aggressiveness. Furthermore, management of publicly listed commercial banks needs to engage in aggressive tax planning to enhance their performance; however such level of tax aggressive planning should be kept minimal as possible to further discourage tax fraud and evasion.