THE ROLE OF TAX SHELTERING IN SHAPING EARNINGS QUALITY AMONG NIGERIAN OIL AND GAS COMPANIES

This paper assessed the effect of tax sheltering measured using cash effective tax rate, tax savings and book tax gap on earnings quality (the modified Jones earnings model) of listed oil and gas firms in Nigeria from2017 -2021. Data was sourced from 10 listed oil and gas firms. The paper adopted ex-post facto design. Multiple regression was conducted and the result shows that cash effective tax rate and tax savings have insignificant effect on earnings quality of the sampled firms while book tax gap significantly affect earnings quality of the sampled firms. Based on the findings, the paper concluded that cash effective tax rate and tax savings insignificantly affects earnings quality while book tax gap has a significant effect on earnings quality of the sampled firms. Arising from the conclusion above, the paper recommended that prospective investors as well as business managers should access the book tax gap to find out the quality of earnings in a firm before investing. Even as investors aspire for higher returns, an increase in the tax book gap might give rise to higher returns