Managerial ability and earnings quality of Nigerian listed deposit money banks

Abstract

Globally, stakeholders are concerned about managerial ability and financial reporting quality. The management is usually accused of taking advantage of the information asymmetry arising from agency contracts to manipulate earnings quality. However, there is limited extant literature on the subject matter in Nigeria. The study fills the gap by examining the effect of managerial ability on the earnings quality of listed deposit money banks in Nigeria. We collected data on relevant variables from 2006 to 2020. Data envelopment analysis, Tobit regression and the ordinary least squares method are employed in analysing the secondary data collected. The result indicates that managerial ability is positively and significantly associated with earnings quality. The study concludes that managers with highly technical improve earnings quality in line with Resource Based view theory.