Accrual estimates, earnings persistence and listed consumer and industrial goods firms in nigeria

The study investigated the effect of accrual estimates on earnings persistence of listed consumer and industrial goods firms in Nigeria. The study employed the ex post facto research design and was anchored on the Signaling Theory. It proxy accounting estimates (being the independent variable) using depreciation estimates, intangible assets estimates, current tax estimates, and pension liability estimates earnings persistence (the dependent variable) was measured using earnings per share. The study used a sample of 25 out of the 33 listed consumer and industrial goods companies’ in Nigeria. These were purposively selected. The data collected and used for the study was for a period of 7 years from 2013 to 2019. The Panel Multiple Regression Technique was employed in testing the hypotheses formulated. Descriptive and correlational analysis were also carried out. The results indicated that accrual estimates, jointly, was significant in influencing earnings persistence at 5% significant level. The study concluded that accrual manipulations influenced persistence of listed consumer and industrial goods firms. It was also recommended that the provisions of IAS 16 should be followed when estimating depreciation so that it does not affect the way performance is measured. Secondly, since the estimated amount of Intangible assets has significant effect on the earnings persistence of listed firms, they should estimate it with optimality and reasonability since affects the performance. Thirdly, since current tax estimates have significant positive effectson both the earnings persistence in Nigeria, it means that firms should be mindful when estimating current tax, as this could affect the way their performance is measured. And finally it was recommended that pension liabilities also should be estimated using the provisions of IAS 19, since it does not have significant effects on the earnings per share of listed consumer and industrial goods firms in Nigeria.