Abstract
This study investigates the effect of firm characteristics on earnings management among listed oil and gas companies in Nigeria. The specific objectives include examining the impact of firm size, leverage, profit, and board independence on discretionary accruals. An ex post facto research design was employed, analyzing existing data from purposively selected companies. A functional econometric model was used to test the relationships between discretionary accruals and firm size, leverage, profit, and board independence. Augmented Dickey-Fuller (ADF) tests were conducted to assess the stationarity of the variables, showing that while the firm size was stationary at levels, other variables required differencing to achieve stationarity. Regression analysis revealed that firm size, leverage, profit, and board independence all significantly influenced discretionary accruals. The study's major contribution is highlighting the significant impact of these firm characteristics on earnings management in the Nigerian oil and gas sector. Recommendations include enhancing monitoring mechanisms and internal controls to prevent manipulative accounting practices and improving regulatory oversight to ensure greater financial transparency and integrity.