Despite strict rules and regulations governing firms in the financial system, it is not clear whether managers use opportunistic behaviour to report earnings. This study investigates the relationship between managerial characteristics and earnings quality of listed banks in Nigeria. The managerial characteristics variables used are: performance, managerial ability, managerial ownership and managerial cash holding. This study utilises the Q test model to measure earnings quality of 17 listed banks in the Nigeria Stock Exchange between 2006 and 2010. 

The study also investigates the association between earnings quality and bank specific and economic specific characteristics; and whether these characteristics impacted significantly on the earnings quality-managerial characteristics relationship. Data for the study were obtained from secondary sources and analysed using logistic regression analysis. The results revealed that managerial characteristics have significant positive effect on the level of earnings quality. 

The results also revealed that bank specific characteristics have significant effect on the level of earnings quality while size and global financial crisis do not have significant effect on the level of earnings quality of listed banks in Nigeria. Based on these findings, the study recommends among others that regulatory bodies should take the issue of managerial characteristics seriously when taking decisions about management of banks. 

A situation where management is changed without recourse to these characteristics can lead to earnings management thereby reducing earnings quality. Also, CBN should adopt the use of Q Test model as used in this study to conduct earnings quality assessment test on financial reports delivered to it by banks. This will ensure that signs of low earnings quality are detected early and warning signals could be sent to bank management and other government agencies.