Audit Characteristic and Financial Reporting Quality in Nigeria

Abstract

The study examined the effect of audit characteristics on the quality of financial reporting among listed non-financial firms in Nigeria.  This was with a view to providing information on the relevance of audit principles and attributes to financial reporting quality enhancement in Nigeria.

This study used secondary data. The population of the study comprised 112 firms listed on the stock exchange at the end of 2018. Purposive sampling technique was used to select firms with up-to-date published financial data and whose data were traded on the stock market totaling 50. Data on audit characteristics as well as financial reporting quality were obtained from the firms' annual reports, the publication of the Nigeria Stock Exchange (NSE) as well as the website of the firms. In analyzing the result, the study used pool ordinary least squared, fixed effect and random effect estimation techniques.

The results showed a positive and significant improvement on the financial report in Nigeria during the period of 11 years under review (2008- 2018).  The results showed that audit characteristics index is positively and significantly (t = 5.786, p < 0.05, t = 5.209, p < 0.05, t =11.513, p < 0.05) influence financial reporting quality index in ordinary least squares, random and fixed effect estimations respectively.

The study concluded that audit characteristics have greatly and significantly enhanced the quality of financial reporting in Nigeria.