Authors : Airebo Atumye Benjamin; Emmanuel Onoja

Volume/Issue : Volume 11 - 2026, Issue 4 - April

Google Scholar : https://tinyurl.com/3zs9z9an

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DOI : https://doi.org/10.38124/ijisrt/26apr2172

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Abstract : This study investigates the moderating effect of whistleblowing disclosure on the relationship between creative accounting practices and shareholders' value in listed deposit money banks in Nigeria. The issue of creative accounting, while not necessarily illegal, can mislead investors and harm shareholder value through techniques like income smoothing, earnings management, and tax manipulation. Whistleblowing mechanisms, which allow insiders to report unethical behavior confidentially, may play a crucial role in curbing these practices and enhancing financial transparency. The study uses an ex-post facto research design, analyzing secondary data from seven listed deposit money banks in Nigeria between 2014 and 2024. A fixed-effect regression model is employed to assess the impact of income smoothing, earnings management, and whistleblowing disclosure on Earnings Per Share (EPS). The results reveal significant positive relationships between creative accounting practices and EPS, with p-values for income smoothing (0.020), earnings management (0.059), and whistleblowing disclosure (0.005), indicating their importance in influencing shareholder value. The interaction terms between whistleblowing disclosure and both income smoothing and earnings management show highly significant effects, suggesting that effective whistleblowing mechanisms can moderate the negative impacts of creative accounting. Based on these findings, it is recommended that Nigerian banks enhance whistleblowing systems to improve financial transparency, align employee and investor interests, and foster a culture of ethical behavior. These measures could help safeguard shareholder value and improve the integrity of financial reporting in the banking sector.

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