Real Earnings Management and Dividend Payout among Non-financial Institutions in Nigeria

Aims: This study seeks to evaluate the consequences of real earnings management and dividend payout among non-financial institutions in Nigeria.

Study Design: The study adopted Descriptive and ex-post facto research design.

Place and Duration of Study: Department of Banking and Finance, Niger Delta University, Wilberforce Island, Bayelsa State, Nigeria. The study was carried out between October 2019 and January 2020.

Methodology: To this end, we made use of Descriptive and ex-post research design, secondary data set, collected from thirty five quoted non-financial institutions for the period 2015 and 2018 financial period. The data were analyzed using Descriptive Statistics, Correlation Matrix.

Results: Our findings align with the agency theory which suggests that despite the fact that corporate contracting is primarily designed to align incentives between principals and agents, agency concerns are still created as a result of incompleteness and rigidities in binding of contracts, which lead to manipulation of the reporting process consequently altering shareholders returns in form of dividend payout.

Conclusion: Specifically, we find that real earnings management is been modulated through expenses. The variables of abnormal production and cash flow from operations show no significant effect on dividend payout with respect to the institutions and period under review.