Audit fees and financial reporting quality of listed non-financial services firms in Nigeria: Moderating role of audit committee independence (original) (raw)
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Zenodo (CERN European Organization for Nuclear Research), 2023
Audit tenure in particular, has become a lingering issue after the accounting scandals involving wide-ranging corporate entities from both local and global business environments. This lingering issue has prevented auditors from conducting some specific non-audit services. This study examines the moderating role of audit committee independence on the relationship between audit tenure and financial reporting quality of listed non-financial services firms in Nigeria over a period of 2011-2021. The study employed ex-post facto as the research design for the study while data was obtained from the secondary sources. The method of data collection was by extraction from the annual audited financial reports and accounts of listed non-financial services firms in Nigeria. The sample size comprises of 30 listed non-financial services firms selected using purposive sampling techniques. Multiple regression was employed as the techniques for data analysis in the study. The Results of the analysis showed that the direct relationship has no effect on financial reporting quality of listed non-financial services firms in Nigeria. However, the effect of audit tenure on financial reporting quality is statistically significant when moderated by audit committee independence. The study recommends that more independent directors should be included on the audit committee of listed non-financial companies in Nigeria in order to improve the financial reporting quality of listed non-financial companies in Nigeria.
Audit Fees and Financial Reporting Quality: A Study of Listed Companies in Nigeria
International Review of Management and Business Researcha, 2018
This paper examines the relationship between audit fees and financial reporting quality of listed firms in Nigeria. We use 88 listed companies in Nigeria for the period of 2012 to 2016. The data were obtained from the annual reports of the listed firms and Thompson Reuters DataStream. Accruals model was used to represent financial reporting quality. A multiple regression was employed in the estimation model. The study reveals that higher audit fees are associated to lower level of discretionary accruals and thus imply higher financial reporting quality. The result also supports the resource dependence theory which proposes that higher percentage of financial experts in the board lessen the degree of accounting manipulation. The study provides an understanding to investors, policymakers and regulators about the pivotal role of audit fees in reducing accounting manipulation and in enhancing financial reporting quality in the listed firms in Nigeria.
The Relationship between Audit Committee Attributes and Audit Fees of Listed Companies in Nigeria
The Journal of Social Sciences Research, 2018
This paper examines the influence of audit committee (AC) attributes on audit fees (AUF) of 440 firm-year observations of listed companies in Nigeria for five year period (2012 to 2016). A multiple regression was employed in estimating the model using robust standard errors. We explore and improve prior literature of same relations by using additional variables (AC legal experts, AC stock ownership and AC chair independence). The study found that (AC size, AC financial accounting experts, AC legal experts and AC stock ownership) are positively associated with AUF in their quest for greater audit assurance. The study also established that female AC and AC chair independence act as substitute to audit quality which praises that higher internal control will be accredited to lower audit process. The findings and inferences are also consistent with complementary hypothesis of audit quality (payment of high fees in an exchange for better audit efforts. Our result is conclusive and robust for the inclusion of the foregoing AC attributes that were limitedly explored by prior studies in this relationship. Our study provides an insight on the importance of AC legal experts; AC stock ownership and AC chair independence to the current and potential stakeholders who are the direct users of financial reports. The study informs regulators and policy makers the potential influence of these unique AC attributes on auditors' price which is one of the most crucial drivers of audit quality
2016
This study investigates the characteristics of audit committee and its effect on the quality of financial reporting of Nigerian listed firms. We employed multivariate regression as a tool for analysis. The sample for the study was 101 firm-years longitudinal panels of 505 observations of non-financial listed companies on the Nigerian Stock Exchange for the period 2010 to 2014. The McNicholas (2002) measure of earnings quality was adopted to examine the monitoring mechanisms on the quality of financial reporting. The results show that control variables of company age and company size significantly affect the quality of financial reporting. The audit committee, share ownership, and financial expertise was also significant, indicating that audit committee monitoring mechanisms influence the quality financial reporting of listed non-financial firms in Nigeria. Share ownership proved to be a good motivator for audit committee members making them to be more vigilant, enthusiastic and acti...
2017
The purpose of this study is to evaluate the effect of Audit Committee Qualities on Financial Reporting of listed companies in Nigeria. The study used structured questionnaires administered to a sample of 145 administrative staff of selectedlisted companies located in Rivers State, Nigeria to elicit the required data for hypothesis testing. The statistical technique employed in testing and analysing the hypothesis was the Ordinary Least Square regression analysis to accurately establish the effect of the dependent and independent variables with the aid of version 17.0 of the Statistical Package for Social Sciences (SPSS) computer software. Results of the analyses suggested that audit committee independence, audit committee members' qualification and audit committee monitoring function have a significant and positive effect on financial reporting of listed firms in Nigeria. The study provides evidence to shareholders that qualification of audit committee members should be considered seriously during their appointment to improving the quality of financial reporting and achieving audit committee members' independence. Moreover, the result highlights the need for companies to organise training for audit committee members in the areas where in-depth knowledge is required especially on the application of new accounting standards which will aid financial reporting process of the company. The paper creates awareness on the need for identifying monitoring functions that are vulnerable to manipulation for critical analysis and intensive review in those areas.
International Journal of Academic Research in Business and Social Sciences, 2017
This paper examined the relationship of audit committee size and financial reporting quality in Nigeria. The empirical study has performed using a sample of 189 companies and 664 year observation from the period of 2011-2015. One of the desirable features of corporate governance is to enhance financial reporting quality for facilitating efficient and effective resources allocation of economic decision making by corporate managers. Panel data regression was adopted and audit committee size was found positive and significant with financial reporting quality .Our results underscore the importance of the corporate governance recommendation as a mean of strengthening the monitoring and oversight role of audit committee plays in the financial reporting process. Finally the study offered recommendations to enhance financial reporting quality disclosure.
Impact of Audit Committee Attributes on Financial Reporting Quality in Nigerian Quoted Companies
2016
The objective of this study is to evaluate the impact of Audit Committee on financial reporting quality in Nigerian quoted companies. Data for the study were derived from annual reports of one hundred and thirty- one (131) companies quoted on the Nigerian Stock Exchange for the periods, 2006 to 2012. The data were analyzed using descriptive statistics as well as correlation and Ordinary Least Squares (OLS) regression. The multivariate regression technique was utilized to estimate the model. Using the panel regression estimation results, we found that each of the identified audit committee attributes, such as: frequency of meetings, financial literacy, independence, size and attendance at meetings had a positive significant effect on financial reporting quality. Based on these findings, the paper recommends the need for training and seminars to be organized for members of audit committee with a view to enabling them keep abreast of up to date information as regards their roles and re...
2017
The purpose of this study is to evaluate the effect of Audit Committee Qualities on Financial Reporting of listed companies in Nigeria. The study used structured questionnaires administered to a sample of 145 administrative staff of selected listed companies located in Rivers State, Nigeria to elicit the required data for hypothesis testing. The statistical technique employed in testing and analysing the hypothesis was the Ordinary Least Square regression analysis to accurately establish the effect of the dependent and independent variables with the aid of version 17.0 of the Statistical Package for Social Sciences (SPSS) computer software. Results of the analyses suggested that audit committee independence, audit committee members qualification and audit committee monitoring function have a significant and positive effect on financial reporting of listed firms in Nigeria. The study provides evidence to shareholders that qualification of audit committee members should be considered ...
Auditors' Independence and Financial Reporting Quality of Listed Deposit Money Bank in Nigeria
Zenodo (CERN European Organization for Nuclear Research), 2022
The ultimate aim of audit is to ensure that all stakeholders have access to reliable and credible financial information, since the audit report adds credibility to financial statements which form the basis for economic and non-economic decisions made by shareholders and other stakeholders. Therefore, this study examined how auditors' independence determines the financial reporting quality of listed Deposit money banks in Nigeria. The study adopted an ex-post facto research design because secondary data were extracted from published annual reports of 15 listed Deposit Money Banks in Nigeria for a period of 10 years from year 2010 to 2019. The data were analyzed using descriptive statistics and inferentialpanel data analysis. Results from the data analysis showed that there is a significantpositive relationship between Auditors' tenure and financial reporting quality. The provision of non-audit service had a negative relationship with financial reporting quality. The study also found ainsignificantnegative relationship between audit fees and financial reporting quality. It was also found that there is a positive relationship between audit firm size and financial reporting quality.The study, therefore, concluded that there is a significant relationship between the proxies to uditors' independence (auditors' tenure, non-audit services, audit fees, audit firm size) and financial reporting quality of listed deposit money banks in Nigeria.The paper recommends that boards of directors of listed deposit money bansksshould encourage long audit tenure and discourage non-audit services because of the identified positive and negative impactof the two proxies, respectively, on the financial reporting quality of listed Deposit Money Banks in Nigeria.