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ABSTRACT
The study examines the impact of earnings management on stock returns of selected quoted non-financial firms in Nigeria. This was nevertheless accomplished through the specific objectives which included: examining the relationship between total accrual and stock returns, evaluating the extent to which nondiscretionary accrual impact stock returns, determining the relationship between discretionary accrual and stock returns, investigating the extent to which sales manipulation influence stock returns, assessing the extent to which discretionary expenditures affect stock returns, and assess the impact of firm size on stock returns. The study made use of the longitudinal research design. It covers a time period of ten (10) years. The study comprised non-financial firms quoted on the Nigerian Exchange Group. Fifty - nine (59) companies were identified under these sectors using the Taro Yamani formula. The longitudinal research was utilized mainly based on the ground that; the nature of variables involved repeated observations over certain periods. Findings revealed that total accruals were negative and significant to stock returns; also, the results showed that non-discretionary accruals have a positive and significant relationship on stock returns in non-financial firms. The results further showed a positive and significant relationship between discretionary accruals and stock returns in non-financial companies. The results also showed a negative relationship between sales manipulation and stock returns. However, it was found that a positive and significant relationship exists between discretionary expenditures and stock returns. Also, based on the result of the panel regression it was found that firm size has a positive and significant relationship with stock returns. The study recommends that policies should be created by the top management of non-financial companies which are jeered towards managing the variables of earnings in the non-financial companies
