Determinants of Audit Quality in the Nigerian Business Environment

Abstract

The objective of this study was to analyze the determinants of audit quality in the Nigerian business environment. The research empirically examined the relationship between audit quality, engagement and firm related characteristics such as audit tenure, audit firm size, board independence and ownership structure. A regression model was used to analyze the existence of significant relationships between audit quality and the firm/audit related characteristics. Audit firm size, board independence and ownership structure were found to be positively related to audit quality; however, only board independence exhibited a significant relationship with audit quality. Audit tenure exhibited a negative relationship with audit quality which was also not significant. The study recommends the sustenance and possible improvements on the non-executive board composition of organizations.

Keywords: Audit Quality, Audit Tenure, Audit Firm Size, Board Independence, Ownership Structure.