ABSTRACT
This study explores the relationship between audit tenure, audit quality, auditor independence, and financial misstatements using data from companies listed on the Nigerian Exchange Group (NGX) between 2019 and 2023. Employing a quantitative research approach, the study utilizes secondary data, including annual financial statements and audit reports, analysed through descriptive statistics, correlation analysis, and regression models. The key findings reveal a weak negative relationship between audit tenure and audit quality, although the relationship is not consistently significant across all models, with the aggregate model showing a notable negative effect. Auditor independence, on the other hand, consistently exhibits a significant positive relationship with audit quality, underscoring the importance of auditor objectivity and independence in ensuring high-quality audits. The analysis also suggests that financial misstatements do not have a direct, statistically significant impact on audit quality. The aggregate model, which incorporates all the data, provides the best explanatory power, accounting for 79.5% of the variation in audit quality. The study concludes that while audit tenure may pose risks to auditor independence, it is the latter that plays the most significant role in enhancing audit quality. Based on these findings, the study recommends enhancing auditor independence through stricter regulatory measures, potentially introducing auditor rotation policies, and strengthening audit oversight to reduce financial misstatements and improve audit quality. Additionally, it calls for further research to explore the broader industry-specific effects of audit tenure and independence across different sectors.
