Impact of Auditors’ Independence on Financial Reporting Quality: Evidence from Nigerian Listed Companies

Abstract

This study examines the relationship between external auditor independence and financial reporting quality in Nigerian listed companies. Specifically, it investigates the influence of auditor tenure, audit fees, and auditor status on financial reporting quality, while considering control variables such as firm size and leverage. Furthermore, it explores the moderating effect of audit committee financial expertise on this relationship. The study utilizes a sample of Nigerian listed companies and employs quantitative analysis to test the hypotheses.

The findings showed auditor tenure and auditor status have a significant and positive relationship with financial reporting quality. However, the study fails to find any significant relationship between audit fees and financial reporting quality. When tested for the moderating effect, the result indicates that audit financial expertise moderates the relationship between auditor tenure, auditor status, and financial reporting quality. The findings contribute to the existing literature on corporate governance and financial reporting quality in emerging markets, providing valuable insights for regulators, practitioners, and academics.