Residual audit fee and real income smoothing: evidence from quoted non-financial firms in Nigeria

Purpose The study investigated the relationship between residual audit fee and real income smoothening, proxied as operating cash flow production expenditure smoothing of non-financial firms in Nigeria. Design/methodology/approach relied on secondary data from annual financial statements 75 sector 2010 to 2019. estimated using a modified model several contexts suit Nigerian environment. hypotheses were tested dynamic panel GMM estimation procedure. Findings results showed significant negative effect (real) firms. control variables mixed effects for industry-related (firm size profitability), auditor attribute (audit quality report lag) board related (board independence). Research limitations/implications included analysis selected based availability MachameRatios® occurrence missing values some used various models may bias results. Practical implications identifies nexus RAF earnings management practices firms; shows implication payment overall conduct audit. More so, findings CVs suggest that context developing economies, shareholders capital markets regulators should be watchful fees utilise it gauge also an indicator opportunism weak internal firm future assessments. Social stems its relevance market stability potential disastrous corporate failure practices. Originality/value develops newly explore rather than widely prior literature; secondly, focus activities manipulation present additional evidence applies countries accrual measurement technique economic bonding perspective.