Pages: (39-49 )
Abstract
Corporate managers engage in earning management, inflating current earnings at the expense of the business' economic values, in order to attain a high stock price and/or earnings in order to satisfy the earnings benchmark. We argued in this study that audit Quality might mitigate earnings management. of 16 consumer goods listed manufacturing firms in Nigeria for the period 2010-2019. The study relied on the data on abnormal cash flow from operating activities, audit fee, audit size and audit tenure were drawn from the published annual report and accounts of the sampled companies. Pearson correlation and OLS regression were employed in the analysis of data. The effect of audit quality on abnormal cash flow from operating activities is positively significant. The study recommended that Management of listed firms in Nigeria should maintain stability and consistency in their earnings, while avoiding earnings management as much as possible. This is by employing uniform accounting policy in accordance with the relevant accounting standards for the preparation of financial accounting information. Management of listed firms in Nigeria should create more innovative ideas and inventions that are substantial enough to project the earnings of the organizations to acceptable level.
Keywords: Abnormal Operating Cash Flow, Audit quality, Audit size,