AUDIT QUALITY AND FIRM PERFORMANCE IN NIGERIA'S CONSUMER GOODS SECTOR
Abstract
This study investigates the influence of audit quality on the financial performance of listed consumer goods firms in Nigeria, focusing on audit independence, audit firm size, audit fees, and audit report timeliness. Using an Ex-Post Facto research design, secondary data were collected from the annual reports of fifteen purposively selected firms over the period 2013–2022. The findings reveal that audit independence and timely audit reporting exert significant positive effects on firm performance, highlighting the importance of auditor objectivity and prompt financial disclosure in enhancing profitability and investor confidence. Conversely, audit firm size does not demonstrate a significant impact, indicating that engagement with large audit firms alone does not guarantee superior financial outcomes, while higher audit fees show a negative relationship with performance, suggesting that excessive costs may constrain short-term profitability. The study concludes that qualitative aspects of audit quality, particularly auditor independence and timeliness, are more critical to firm performance than structural characteristics such as audit firm size. Recommendations include promoting auditor independence through strengthened regulatory policies, emphasizing auditor competence and ethical standards over brand size, negotiating audit fees to balance quality and cost efficiency, and ensuring timely completion and dissemination of audit reports to improve transparency and sustain stakeholder confidence in Nigeria’s capital market.
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Published in BUSINESS AND FINANCE JOURNAL
ISSN: 988-47878
This article appears in our peer-reviewed academic journal
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