Re-examining the accrual earnings management-firm performance nexus: new insights from panel threshold regression and the panopticon metaphor - Future Business Journal

The Future Business Journal article re-examines how earnings management and firm performance relate, using panel threshold regression and a “panopticon” metaphor. Across three sequential estimation specifications, it reports bootstrap p-values for linearity tests of p = 0.000, which the authors say confirms a statistically significant threshold effect and supports a nonlinear framework. It describes firm performance with an average return on assets (ROA) of 8.03% for sampled Sub-Saharan African firms, stating this is broadly comparable to other emerging economies such as MENA but modest relative to government securities. Using Tobin’s Q as a robustness check, the mean value of 1.882 is interpreted as firms being valued above replacement cost, while governance is captured by a CGQ index with a mean of -0.209 (SD 0.917), indicating below-average governance on average. The paper also reports discretionary accruals averaging about 0.02, and summarizes average log firm size of 5.29, log firm age 3.80, and log leverage 3.81.