AUDIT ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED FIRMS IN NIGERIA

ABSTARCT

External auditors conduct an independent examination of a firm’s financial statements, records and supporting documents and give opinion about the truth and fairness of the reports, and that the report is free from material misstatements and errors. While, this can be considered as a good control mechanism for ensuring the quality of corporate financial reporting, there is a great concern by the regulatory authorities and other stakeholders in view of the corporate scandals and failures that adversely affect corporate entities in recent times in Nigeria. This study examined the impact of audit firms‟ attributes on financial reporting quality of quoted firms in Nigeria. The study found that audit compensation and audit firm independence have significant positive impact on the financial reporting quality of quoted firms in Nigeria at 99% confidence level. The finding suggested that, audit compensation and provision of non-audit services in the quoted firms in Nigeria have improved the quality of their financial reporting during the period under review. The study recommends that, policy makers (SEC and FRC) should make policies that would strengthen the auditors‟ independence in the firms in Nigeria. It is also recommended that SEC and FRC should make it a policy that public companies, should consider in employing their auditors an optimal compensation.