Determinants of Audit Quality and Audit Quality: A Study of Listed Companies in Nigeria

Abstract

The study ascertained the determinants of audit quality of listed companies on the Nigerian Stock Exchange. Ex Post Facto research design was used for the study. A sample of sixty three (63) companies was used for the study from a population of one hundred and seventy companies listed on the Nigerian Exchange. The binary logit regression was applied when the dependent variable is dichotomous in nature (i.e. 1 and 0). Based on the outcome, it could be deduced that the explanatory variable of auditors’ independence poses an inverse significant impact on audit quality. The result also showed that audit tenure has a significant negative impact on audit quality. Based on the findings of this study, it was recommended among others, that management are expected to ensure strong corporate governance principles that would ensure that external auditors remain independence of insiders’ influence. This is expected to enhance the auditors’ objectivity which would lead to higher audit quality ceteris paribus.