European Journal of Accounting, Auditing and Finance Research (EJAAFR)

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Earnings Quality and Market Values of Listed Companies in Nigeria


Globally, earnings quality plays a vital role in investment and managerial decisions in the capital market. This study investigated the impact of earnings quality on market values of listed quoted companies in Nigeria for the period 2009 to 2019. Secondary data was extracted from the financial statements of all the 173 quoted companies that make up the population of the study while the sample size used for the study is 51. Earnings quality as an independent variable of the study was proxy by Accruals Quality, Earnings Persistence, Earnings Predictability and Earnings Smoothness, while Market Share Price was used to represent market value as dependent variable of this study. This study adopted generalized least square robust fixed effect multiple regression technique in analyzing the data. The findings of the study show that Accrual quality and Earnings Smoothness has significant negative impact on the market value of listed quoted firms in Nigeria, while Earnings Persistence and Earnings Predictability has significant positive impact on the market share price of listed quoted firms in Nigeria. The study recommended that financial statement users, market analysts and investors should consider cash flow statement more when considering the predictability of firm’s earnings quality. This is because most of the required information to predict future cash flows is found in cash flow statement and comparative statement of operating cash flows and this will help them to make a more logical decision.

Citation: Augustine Ayuba (2022) Earnings Quality and Market Values of Listed Companies in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 3, pp.76-91

Keywords: Earnings persistence, accruals quality, earnings predictability, earnings smoothness, market share price

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