IMPACT OF AUDIT QUALITY ON TAX COMPLIANCE IN NIGERIA

Oladele Rotimi (), Dinatu Nna Alabadan (), Adediran Rasheed Adekunle (), Oladele Taiwo Olabode () and Lawal Adenike Moronke ()
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Oladele Rotimi: Department of Accounting, Faculty of Management Science, Federal University Oye-Ekiti, Nigeria, Postal: Department of Accounting, Faculty of Management Science, Federal University Oye-Ekiti, Nigeria
Dinatu Nna Alabadan: Department of Accounting, Federal University Oye-Ekiti, Nigeria, Postal: Department of Accounting, Federal University Oye-Ekiti, Nigeria
Adediran Rasheed Adekunle: Department of Accounting, Adekunle Ajasin University Akugba Akoko, Ondo State, Nigeria, Postal: Department of Accounting, Adekunle Ajasin University Akugba Akoko, Ondo State, Nigeria
Oladele Taiwo Olabode: Department of Business Administration, Federal University Oye-Ekiti, Nigeria, Postal: Department of Business Administration, Federal University Oye-Ekiti, Nigeria
Lawal Adenike Moronke: Department of Accounting, Federal University Oye-Ekiti, Nigeria, Postal: Department of Accounting, Federal University Oye-Ekiti, Nigeria

Annals of Spiru Haret University, Economic Series, 2021, vol. 21, issue 2, 141-163

Abstract: The study examined the impact of audit quality on tax compliance proxy as tax revenue in Nigeria. Specifically, the study investigated the relationship that exists between auditor independence, engagement performance and tax revenue knowing that, many times, tax assessment is based on audited financial statement presented by the firms. Survey research design was adopted using primary data sourced from administering structured questionnaire on the respondents selected from amongst the staff of Federal Inland Revenue Service (FIRS), academia (Accountants) and practicing accountants/auditors within Ondo State. The ordinary least square (OLS) model was used to analyse data so collected. The R2 adjusted predictive power of the study was 0.623 (62.3%) and the F-statistic at the 0.01 and 0.05 level of significance which are 4.79 and 3.07 and is less than 6.047 which was a clear indication that auditor independence and engagement performance have a significant effect on audit quality with resultant effect on tax compliance (tax revenue) in Nigeria. The study therefore recommends that auditors should embrace independence and strictly adhere to established standards and procedures laid down by the government, professional bodies when reporting to enhance audit quality at all times; it is believed this will foster tax revenue generation to argument dwindling revenues

Keywords: Audit Quality; Auditors’ Independence; Tax Revenue; Audit Engagement (search for similar items in EconPapers)
JEL-codes: H26 (search for similar items in EconPapers)
Date: 2021
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