EXPLORING THE RELATIONSHIP BETWEEN CORPORATE GOVERNANCE AND AUDIT QUALITY IN NIGERIA'S LISTED FIRMS

Abstract

The study examined corporate governance and audit quality of listed firms Nigeria. Specifically, the study examines the effect of corporate governance mechanisms on audit quality of listed firms in Nigeria using data from 2018 to 2022. The study employed the ex post facto research design while data is gotten from the financial statement of 31 companies which are purposively sampled out of 156 firms listed on the Nigerian Exchange Group. The panel regression technique is employed as a method of data analysis. The first hypothesis is tested using a fixed effect regression model. The result shows that both board size and audit committee size have negative insignificant effect on audit tenure of listed firms in Nigeria. On the other hand, board diversity has a negative significant effect on audit tenure of listed firms in Nigeria. The second hypothesis is tested using a random model. The result shows that both board size and board diversity have positive insignificant effect on audit fee of listed firms in Nigeria. On the other hand, audit committee size has a negative insignificant effect on audit fee of listed firms in Nigeria. The third hypothesis is tested using a pooled model. The result shows that board size has a positive significant effect on audit firm size of listed firms in Nigeria. On the other hand, board diversity has a positive insignificant effect on audit firm size of listed firms in Nigeria while, audit committee size has a negative insignificant effect on audit firm size of listed firms in Nigeria. It is recommended that, corporate governance of firms in Nigeria should adhere to regulations that require companies to rotate their external auditors periodically to prevent long-standing audit tenure relationships that could compromise quality of audit service provided. This will foster a healthier audit environment and encourage auditors to maintain objectivizes