Summary
The objective of this study is to investigate whether there is evidence of earnings management during the Nigeria banking crisis of the 1990s. I hypothesize and find that Nigeria banks generally show a positive association between earnings before taxes and provisions for loan loss and loan loss provisions; indicating earnings smoothing. Also that healthy banks have smoother earnings than distressed ones, even as the latter continue to deliberately under-provide/understate loan loss provisions to inflate profitability, thus benefiting from the naivety of Nigerian public to 'fixate' on profits as a measure of banks soundness. This trend enables those banks to continue to attract deposits and banking businesses from unsuspected banking public until their eventual collapse and belated regulatory interventions.
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Earnings Management and the Banking Crisis of the 1990s: Evidence From Nigeria
ABSTRACT
The objective of this study is to investigate whether there is ev...See the full content of this document
(Copyright 2011)
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