Audit Firm Attributes and Independence of Auditors: Evidence from Nigeria’s Listed Manufacturing Companies
Mubaraq Sanni (),
Taofeeq Abdulazeez () and
Mudathir Babatunde ()
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Mubaraq Sanni: Kwara State University
Taofeeq Abdulazeez: Kwara State University
Mudathir Babatunde: Osun State Polytechnic
The Journal of Accounting and Management, 2021, issue 2(11), 176-185
This study sought to examine audit attributes and independence of auditors: evidence from listed manufacturing companies, Nigeria. A research survey was conducted on 26 listed manufacturing companies with head offices in Lagos, Nigeria. The companies were selected by using the Taro Yamani method while simple random sampling was used to select the respondents and a total number of 78 questionnaires were administered. The data collected from the survey was analyzed with the aid of the Partial Least Square- Structural Equation Model regression technique. Results of the study show that firm tenure and size have a positive and significant relationship with auditor independence. Control variable, provision of non-audit assurance services also has a positive and significant relationship with independence. However, the second control variable, audit fees, showed a positive but insignificant relationship with auditor independence. Based on these findings, the study concludes that audit firm tenure, rendering of non-assurance audit services impairs independence while audit firm size enhances it. The study, therefore, recommends that regulatory provision of rotation of auditors be respected; there should be lifting of the veil of incorporation to ascertain companies that provide non-audit services and sanction of auditors if it is discovered that they are providing non-audit services to their audit client under another name.
Keywords: Auditor independence; Firm size; Audit fees; Firm tenure; Rotation (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:dug:jaccma:y:2021:i:2:p:176-185
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