EFFECT OF AUDIT FEE ON REAL ACTIVITIES MANIPULATIONS OF LISTED MANUFACTURING FIRMS IN NIGERIA
The incessant reported cases of manipulations of accounting figures in the financial statement of companies globally have led to loss of stakeholders’ confidence in the audited financial statements of firms as the auditors failed to alert the stakeholders in their reports. Therefore, this study examined the effect of audit fee on real activities manipulation of listed manufacturing companies in Nigeria. Ex-post facto research design was employed as the research design. The population of the study consisted of seventy-four (74) listed manufacturing firms in the Nigerian Stock Exchange. Forty-one (41) firms stratified and randomly selected as its sample size. Descriptive statics, panel regression analysis technique and Analysis of Variance (ANOVA) were employed in the analysis of the secondary data collected from the annual reports and accounts of the chosen sample firms for the period of six years (2012-2017). The study found that audit fee had a significant negative effect on the real activities manipulations as shown by the p-value of 0.000. The result of the study also revealed that there was no significant difference in the level of earnings management practice in the sub-sectors of the listed manufacturing companies in Nigeria as shown by the p-value of 0.326. The study recommended that policy makers such as the Institute of Chartered Accountants of Nigeria should not reduce the current scale of professional fee set by it in a gazette in May, 2011,in order to prevent likely future impairment of auditor’s independence.
