DIRECTORS’ REPUTATION CAPITAL AND AUDITOR SELECTION CHOICE OF QUOTED MANUFACTURING FIRMS IN NIGERIA
Keywords:Reputation Capital, Auditor Choice, Directorship Industry Reputation, Directorship Experience Reputation
AbstractThis study investigated the effect of directors’ reputation capital on auditor selection choice of quoted manufacturing firms in Nigeria. Reputation is one of the top 10 business risks and a potential threat to a company’s wellbeing or even its existence; the study specifically evaluated the effect of directorship industry reputation and directorship experience reputation on the choice of selecting an audit firm. The study is anchored on two theories: ‘agency theory’ and ‘resource dependency theory’. The study adopted the ex-post facto research design. The population of the study included all manufacturing firms quoted on the Nigerian Stock Exchange (NSE) as of 31st December 2019. The study relied on secondary sources of data which was obtained from the Nigerian Stock Exchange (NSE) as of 31 st December 2019. The study employs binary logistic regression to test the hypotheses. The study revealed a non-significant negative effect of directorship industry reputation on the choice of selecting a Big-4 or non-Big-4 audit firm. The study also found a significant positive effect of directorship experience reputation on the choice of selecting a Big-4 or non-Big-4 audit firm. Consequent to the findings, the study, therefore, recommends amongst others that the possible loopholes that may elude particular audit firms based on experience are put into consideration in the decision to choose a Big-4 or non-Big-4 audit firm.
How to Cite
Ejimadu, A. R., Egbunike, P. A., & Egbunike, F. C. (2021). DIRECTORS’ REPUTATION CAPITAL AND AUDITOR SELECTION CHOICE OF QUOTED MANUFACTURING FIRMS IN NIGERIA. Journal of Contemporary Issues in Accounting, 1(1), 162–182. Retrieved from https://journals.unizik.edu.ng/jocia/article/view/907