EFFECT OF AUDIT CHARACTERISTICS ON FINANCIAL REPORTING QUALITY OF LISTED CONSUMER GOODS COMPANY IN NIGERIA

Abstract

The study examines the effect of audit characteristic on financial reporting quality of listed consumer goods companies in Nigeria for the period 2009-2018. This study adopted Ex-post facto research design. The population for this study was the twenty-one (21) consumer good firms listed on the Nigerian Stock Exchange (NSE) as at 2018. However, only firms that have up-to-date data with regards to audit characteristics and financial reporting quality were selected to constitute the sample size of the study. The study adopted the use of empirical analysis tools including descriptive statistics and using ordinary least squares (OLS) panel regression technique to determine the relationships between the research variables. The analysis shows that Audit type has no significant effect on the financial reporting quality of quoted consumer goods firms in Nigeria. Also the study reveals that Audit tenure has significant negative effect on the financial reporting quality of listed consumer goods companies in Nigeria. In contrast, the study shows that audit size has significant positive effect on the financial reporting quality of listed consumer goods companies in Nigeria. The study recommends that listed consumer goods companies in Nigeria should improve on the type of audit firm that are employed to audit their companies as this will strengthen their financial reporting quality. Also listed consumer goods companies in Nigeria should reduce the period of tenure of audit firm as it has a negative influence on their financial reporting quality. The study also recommends that big auditor firm with big size should be patronized by listed consumer goods companies in Nigeria so as to have a reliable financial reports.