Does Industry Volatility Matter? A Cross Comparison of Earnings Roundup in Financial Services and Real Sector Companies in Nigeria

  • Oladipupo M. Tijani Al-Hikmah University
  • Karimu A. Ishola Al-Hikmah University
  • Ini E. Udofia University of Lagos
Keywords: Earnings roundup, Qualitative disclosure, Earnings management, Institutional differences, Regulation


The study set out to examine cross-sectorial differences in earnings roundup, using a sample of 103 listed firms. In particular, the study investigated corporate tendencies to roundup earnings number (net income). Despite international market pressure and regulatory requirements for qualitative disclosure, the results reveal that earnings roundup varies systematically across financial and real sector companies. In addition, financial firms show a greater tendency to round up the second digit of quarterly earnings, as well as annual earnings, than do real sector companies. The current study provides support for formal (e.g., legal, corporate governance, regulation) and informal (e.g., business culture, stakeholder pressure and social norms) institutional differences as an influencing factor in earnings management. This paper has important policy implications and contributes to ongoing debate on financial reporting quality by showing that companies in financial services have a greater tendency to manage earnings.


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How to Cite
Tijani , O. M., Ishola, K. A., & Udofia, I. E. (2019). Does Industry Volatility Matter? A Cross Comparison of Earnings Roundup in Financial Services and Real Sector Companies in Nigeria. Global Journal of Accounting, 5(1), 37-43. Retrieved from