Author: Okaro Sunday Chukwunedu
Department: Accountancy
Affiliation: Nnamdi Azikiwe University Awka

This work evaluates the practice of auditing in Nigeria in order to determine empirically factors that affect audit quality some of which if addressed will help in stemming the tide
of audit failures. Descriptive research design was adopted. The study also made use of secondary data. Primary data were obtained through a survey in which questionnaires were administered on a sample of 400 respondents drawn from Investors, Regulators, Auditors and Accountants. The questionnaire was pilot-tested. In addition the Cronbach alpha test was used to confirm the reliability of the research instrument. Secondary data was extracted from the annual reports of a sample of 104 companies randomly selected from a population of 134 non-bank companies listed in the Nigerian Stock Exchange. Banks were excluded from the study because of the special regulations guiding their operations. The dependent variable of the study is audit quality while independent variables included Board size, Board independence, Board diligence, Audit committee size, Audit Committee diligence and audit committee independence. Data obtained were analysed using percentages means and standard deviation and the formulated hypotheses were tested with the aid of T-test statistics and binary logistic regression model. Findings show that provision of Non-audit services to audit clients by an auditor compromised audit quality. Findings also show that small board size and board diligence impacts positively on audit quality. Some cultural factors were also found to be negatively and significantly associated with audit quality. The implication of the findings is that regulation and good corporate governance practices do have positive effects on audit quality while some cultural factors have a debilitating effect on audit quality. The study recommends that the present restriction on Nigerian auditors from providing certain non-auditing services to their audit clients should be sustained. Small board size and greater board diligence should be mandated in the Nigerian corporate governance landscape. While renewed effort should be made to rein in the monster of corruption in the wider society. Finally the study designed a model to guide Regulators and other stake holders in the search for audit quality.

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