Effect of Income Smoothing on Financial Performance of Listed Deposit Money Bank in Nigeria
Abstract
The study examined the effect of income smothening on financial performance of listed deposit money banks in Nigeria. The study adopted the ex-post facto research design sourced data from the financial statement of three selected Deposit Money Banks (DMO). The stated hypotheses was analyzed using the pool regression analysis. The finding revealed that discretionary accrual has positive and insignificant effect on return on asset of selected listed deposit money banks in Nigeria. It was concluded that discretionary accrual has positive and insignificant effect on return on equity of selected listed deposit money banks in Nigeria. The researchers recommended that investors in listed deposit money banks should be aware that managers can engage in income smoothing to manipulate the return on asset of the bank, hence, their decisions should not be based on the return on asset of the bank except stronger corporate governance mechanisms are maintained.
Keywords
Income smoothening
Financial performance
Discretionary accrual
Deposit Money
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