Effect of earnings quality on efficiency of quoted deposit money banks in Nigeria

An unqualified information on the quality of earnings of a corporate organization provides assurances of realistic expectation of its future earnings. It also serves as a tool for negotiations and valuation deals in mergers, takeovers and acquisition. The aim of this study was to find out effect of earnings quality on the efficiency of deposit money banks in Nigeria. The study employed secondary data from selected nine (9) listed deposit money banks (DMBs) with international operations authorization for ten years period spanning 2011 – 2020. Panel regression approach was adopted for the study as the data obtained was cross-sectional (i.e. Panel) such that the behavior of variables were observed over time with specific efficiency test scores derived  by conducting data envelopment analysis (DEA) to decompose the model. The result of the analysis shows that there is a significant positive relationship between quality of earnings and the efficiency of Deposit Money Banks in Nigeria. The study therefore establishes that Bank earning quality is significant in predicting the efficiency and sustainability of Deposit Money Banks and therefore recommends strict ethical adherence to provisions of accounting standards with internal control monitoring safeguards mechanism for management to ensure sustainability and secured going concern.