EFFECT OF AUDITORS’ TENURE AND AUDITOR INDUSTRY SPECIALIZATION ON FINANCIAL STATEMENT FRAUD OF LISTED NON-FINANCIAL FIRMS ON THE NIGERIAN EXCHANGE GROUP

Abstract

This paper aimed at ascertaining the effect of auditors’ tenure and auditor industry
specialization on financial statement fraud of listed non-financial firms on the Nigerian
Exchange Group for a period of 2011 to 2022. The study employsex-post facto design and
secondary data. The population consisted of ninety-five (95) non-financial firms listed in the
Nigerian Exchange Group as at December, 2022. The final sample consisted of seven-six
(76) non-financial firms selected using purposive sampling. We applied Robust least square
regression analysis in addition to the application of Beniesh M-score model to proxy the
likelihood of financial statement fraud where applicable, via the E-view 9 software for the
panel data in order to determine the relationship between the variables.Findings from this
study indicated thatauditors’ tenure and auditor industry specialization have no significant
positive effect on financial statement fraud of non-financial firms listed on the Nigerian
Exchange Group.On the basis of the above findings, we recommended thatregulatory
authority should ensure a moderate audit tenure of 5years, to enable the audit firm have
time to understand client’s business and give a thorough audit to reduce financial statement
fraud. The study also recommended that since auditor industry specialization has no
significant effect on financial statement fraud of listed non-financial firms, then regulatory
bodies should enforce compliance on auditing guidelines by audit firms whether industry
specialist or non-industry specialist auditors in other to reduce financial statement fraud.