IDEAS home Printed from https://ideas.repec.org/a/hur/ijaraf/v7y2017i2p145-155.html
   My bibliography  Save this article

Audit Quality Practices and Financial Reporting in Nigeria

Author

Listed:
  • Loveday A. Nwanyanwu

Abstract

This paper examined the influence of audit quality practices on financial reporting in Nigeria, drawing evidence from auditing firms. Data were collected through questionnaire. Univariate, bivariate and multivariate analyses were performed using descriptive statistic, Pearson Product Moment Coefficient of Correlation and stepwise multiple regression. Findings indicate a statistically significantly positively strong relationship between the measures of audit quality (auditor independence, technical training and proficiency and engagement performance) and financial reporting (measured in terms of reliability of financial report). Auditor independence has the highest explanatory power of variations in reliability of financial report of 47.9%. In addition, the regression model with only auditor independence produces the highest value of reliability of financial report. Given the existence of technical training and proficiency and engagement performance, auditor independence is a prime audit quality in financial reporting. Accounting practitioners should imbibe the ethics of independence to achieve credibility and reliability required of financial reports.

Suggested Citation

  • Loveday A. Nwanyanwu, 2017. "Audit Quality Practices and Financial Reporting in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(2), pages 145-155, April.
    • Handle: RePEc:hur:ijaraf:v:7:y:2017:i:2:p:145-155
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Article_15_Audit_Quality_Practices_and_Financial_Reporting_in_Nigeria.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Article_15_Audit_Quality_Practices_and_Financial_Reporting_in_Nigeria.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Giroux, Gary & Jones, Rowan, 2011. "Measuring audit quality of local governments in England and Wales," Research in Accounting Regulation, Elsevier, vol. 23(1), pages 60-66.
    2. Francis, Jere R., 2004. "What do we know about audit quality?," The British Accounting Review, Elsevier, vol. 36(4), pages 345-368.
    3. Titman, Sheridan & Trueman, Brett, 1986. "Information quality and the valuation of new issues," Journal of Accounting and Economics, Elsevier, vol. 8(2), pages 159-172, June.
    4. Choi, Sung K. & Jeter, Debra C., 1992. "The effects of qualified audit opinions on earnings response coefficients," Journal of Accounting and Economics, Elsevier, vol. 15(2-3), pages 229-247, August.
    5. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    6. Mahdi SALEHI & Saeid Jabarzadeh KANGARLOUEI, 2010. "An Investigation of the Effect of Audit Quality on Accrual Reliability of Listed Companies on Tehran Stock Exchange," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(5), pages 940-960, December.
    7. Firth, Michael & Rui, Oliver M. & Wu, Xi, 2012. "How Do Various Forms of Auditor Rotation Affect Audit Quality? Evidence from China," The International Journal of Accounting, Elsevier, vol. 47(1), pages 109-138.
    8. Ronald A. Davidson & Dean Neu, 1993. "A Note on the Association between Audit Firm Size and Audit Quality," Contemporary Accounting Research, John Wiley & Sons, vol. 9(2), pages 479-488, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Efeeloo Nangih, 2017. "Safety Practices and Performance of Oil and Gas Servicing Companies in Nigeria: Empirical Evidences from Selected Companies in Portharcourt," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(4), pages 177-181, October.
    2. Prastika Suwandi Tjeng & Rina Nopianti, 2021. "The Effect of Auditor's Technical Abilities on the Quality of Financial Statement Information," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(6), pages 129-129, June.
    3. Joseph U. Madugba & Kerry E. Howell & Tony Ikechukwu Nwanji & Sainey Faye & Ben-Caleb Egbide & Damilola Felix Eluyela, 2021. "Audit Committee Quality and Financial Reporting in Deposit Money Banks in Nigeria," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(2), pages 104-117, February.
    4. Professor Owolabi, S.A. & Afolayan, Oluwatobi, 2020. "Auditor’s Independence (AUDINDP) and the Quality of Financial Reporting (FRQ) in Listed Deposit Money Banks (DMB’s) in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(8), pages 303-309, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garcia-Blandon, Josep & Argiles, Josep Ma, 2015. "Audit firm tenure and independence: A comprehensive investigation of audit qualifications in Spain," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 24(C), pages 82-93.
    2. Xingqiang Du, 2019. "Does CEO-Auditor Dialect Sharing Impair Pre-IPO Audit Quality? Evidence from China," Journal of Business Ethics, Springer, vol. 156(3), pages 699-735, May.
    3. Sang Cheol Lee & Mooweon Rhee & Jongchul Yoon, 2018. "Foreign Monitoring and Audit Quality: Evidence from Korea," Sustainability, MDPI, vol. 10(9), pages 1-22, September.
    4. Mahdi Salehi & Ali Mansoury, 2009. "Firm Size, Audit Regulation and Fraud Detection: Empirical Evidence from Iran," Management, University of Primorska, Faculty of Management Koper, vol. 4(1), pages 5-19.
    5. Shokrollah Khajavi & Akbar Zare, 2016. "The Effect of Audit Quality on Stock Crash Risk in Tehran Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 20-25.
    6. Lin, Z. Jun & Liu, Ming, 2009. "The impact of corporate governance on auditor choice: Evidence from China," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 18(1), pages 44-59.
    7. Robert M. Bushman & Regina Wittenberg‐Moerman, 2012. "The Role of Bank Reputation in “Certifying” Future Performance Implications of Borrowers’ Accounting Numbers," Journal of Accounting Research, Wiley Blackwell, vol. 50(4), pages 883-930, September.
    8. Seyed Mahmoud Hosseinniakani & Helena Inacio & Rui Mota, 2014. "A Review on Audit Quality Factors," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 243-254, April.
    9. Joseph Weber & Michael Willenborg, 2003. "Do Expert Informational Intermediaries Add Value? Evidence from Auditors in Microcap Initial Public Offerings," Journal of Accounting Research, Wiley Blackwell, vol. 41(4), pages 681-720, September.
    10. Datta, Sudip & Gruskin, Mark & Iskandar-Datta, Mai, 2024. "Auditor certification and long-run performance of IPO stocks," Journal of Financial Stability, Elsevier, vol. 70(C).
    11. Maroun, Warren, 2015. "Reportable irregularities and audit quality: Insights from South Africa," Accounting forum, Elsevier, vol. 39(1), pages 19-33.
    12. Aharony, Joseph & Falk, Haim & Lin, Chan-Jane, 1996. "Changes in ownership structure and the value of the firm: The case of mutual-to-stock converting thrift institutions," Journal of Corporate Finance, Elsevier, vol. 2(3), pages 301-316, February.
    13. Florio, Cristina, 2024. "A structured literature review of empirical research on mandatory auditor rotation," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    14. Jameleddine Ziedi & Anis Feki, 2011. "Impact des caractéristiques du comptable et de ses relations sur son éthique professionnelle," Post-Print hal-00650598, HAL.
    15. Abdul Rahman Al Natour & Naim Salameh Al-Qadi & Rasmi Meqbel & Hala Zaidan & Hamzah Al-Mawali & Manaf Al-Okaily, 2023. "The Role of Privatisation in Sustaining Auditor Independence: Evidence from the Developing Markets," Sustainability, MDPI, vol. 15(8), pages 1-17, April.
    16. Mirza, Malik, 1999. "Disclosure of reserves in the annual reports of Australian mining and petroleum firms," Journal of Energy Finance & Development, Elsevier, vol. 4(2), pages 219-238.
    17. Fouad Jamaani & Manal Alidarous, 2023. "Does the appointment of the three musketeers reduce IPO underpricing? global evidence," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(4), pages 887-929, December.
    18. Steve Fortin & Ahmad Hammami & Michel Magnan, 2021. "Re‐exploring Fair Value Accounting and Value Relevance: An Examination of Underlying Securities," Abacus, Accounting Foundation, University of Sydney, vol. 57(2), pages 220-250, June.
    19. Kristian D. Allee & Daniel D. Wangerin, 2018. "Auditor monitoring and verification in financial contracts: evidence from earnouts and SFAS 141(R)," Review of Accounting Studies, Springer, vol. 23(4), pages 1629-1664, December.
    20. Alain Gilles FOKA TAGNE & Prince Dubois KENFACK HIKOUATCHA & Joséphine Florentine MBADUET & Joseph NDASSI YEPGNOU, 2018. "Qualité d’audit, concentration de l’actionnariat et reporting financier," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 9(1), pages 27-54, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:7:y:2017:i:2:p:145-155. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.