1 MUMJ Mulungushi University Multidisciplinary Journal ISSN: 2958-3926 Vol. 5 No. 1 © Mulungushi University 2023 https://research.mu.ac.zm/research/index.php/mu Earnings smoothing and the shift from actual loan loss provision to expected credit loss Nsama Musawa 1* , Wamulume Mushala 1 , Drighton Muchochoma 1 , Clement Mwaanga 1 1 Mulungushi University, Department of Business, Kabwe, Zambia; Email: nsama.musawa@yahoo.com 1 Mulungushi University, Department of Business, Kabwe, Zambia; Email: wmushala@mu.ac.zm 1 Mulungushi University, Department of Business, Kabwe, Zambia; Email: wdmuchochoma@gmail.com 1 Mulungushi University, Department of Business, Kabwe, Zambia; Email: mwaangac@mu.ac.zm *Correspondence: Nsama Musawa, Email: nsama.musawa@yahoo.com or nnjebele@mu.ac.zm ARTICLE HISTORY: Received Day Month Year; Accepted Day Month Year INTRODUCTION The 2007 monetary crisis brought instability in the financial sector. As a follow-up to this monetary economic crisis, safeguarding the stability and resilience of the financial system remains a topical concern in academic literature and the corporate world. The crisis highlighted deficiencies in accounting for financial instruments. The Incurred Loan Loss (ILL) model previously used under the International Accounting Standard (IAS) 39 was extensively criticised loan loss (ILL) model previously used under the International Accounting Standard (IAS) 39 was criticised for being “too little, too late” in recognition of ABSTRACT Following the 2007 fiscal crisis, safeguarding the stability and resilience of the financial system remains a concern in academic literature and the corporate world. The crisis highlighted deficiencies in the accounting of financial instruments. In response to deficiencies, the International Accounting Standards Board (IASB) developed and issued the International Financial Reporting Standard 9 (IFRS 9) “Financial Instruments”. This standard was issued in 2014 and became effective on January 1, 2018. One of the main reasons for issuing IFRS9 was to tackle the adverse effects of untimely recognition of credit losses in the financial statements of financial institutions. IFRS 9 supplied a complete shift in terms of accounting for loan loss provision by introducing an expected credit loss model compared to the previously incurred loss model under the International Accounting Standard 39..This research assesses whether the implementation of the change in accounting from incurred loan loss provision to expected loan loss provision provides room for earnings smoothing The study employed a quantitative study design were monthly data from all 19 Zambia’s commercial banks registered with the Bank of Zambia at the time of the research was analyzed using regression. The results show no evidence of earnings smoothing both before and during the implementation period. This research has contributed to the current ongoing debate by accounting professionals and researchers on whether IFRS 9 contributes to earnings smoothing among firms. Keywords: Loan loss, earnings smoothing, expected credit loss