DISCRETIONARY ACCRUAL AND OWNERSHIP STRUCTURE OF LISTED MANUFACTURING FIRMS IN NIGERIA

The robust regression analysis further shows that foreign ownership has a negative coefficient of -0.119 but is statistically insignificant (p = 0.490), indicating that changes in foreign ownership do not significantly affect discretionary accruals among listed manufacturing firms in Nigeria during the study period. This finding implies that while the direction of influence aligns with theoretical expectations where increased foreign ownership is presumed to lead to improved financial reporting quality the magnitude of the effect is too weak to be considered statistically meaningful. This result contradicts the empirical evidence from studies such as those by Adebayo, Ogunleye, and Yusuf (2020) and Okafor and Eze (2021), which found that foreign investors in Nigerian manufacturing firms reduce discretionary accruals by enforcing higher reporting standards. However, it supports findings by Chen, Li, and Zou (2021), who caution that the effectiveness of foreign ownership in reducing earnings management depends on regulatory enforcement and the level of investor activism. From a theoretical perspective, agency theory suggests that foreign investors due to their information disadvantage and dependence on formal disclosure should demand greater transparency and thus limit earnings manipulation.