AUDIT QUALITY DISCLOSURES OF PUBLIC NON FINANCIAL FIRMS IN NIGERIA: A FOCUS ON PREDICTIVE FACTORS

Abstract

The study empirically evaluates various factors predicting audit quality disclosures of  selected non-financial firms listed on the Nigerian exchange group. Specifically, the study intends to ascertain the relationship between professional skepticism, audit fee  and audit  quality disclosure of selected  non-financial firms  listed on the Nigerian Exchange group. Adopting the ex-post-facto research design, a population of 116 non-financial firms listed on the Nigerian Exchange group as at March 1, 2021 were framed for the sample selection for the years 2012 to 2021.  Thus, the content analysis approach was deployed for the extract of data from the annual reports of the sampled firms even as the Pearson correlation and Panel Least Square Regression statistical tools were used to test the hypotheses formulated in the study.  The findings of the study show that professional skepticism and audit fee have a significant but negative relationship with audit quality disclosures. Based on these findings, the study concludes that less emphasis will be place on high audit fee as an incentive to producing high audit quality disclosure especially when it is not commensurate with the work. Accordingly, this study recommends that Auditors should prioritized efforts in developing and applying professional skepticism sufficiently and appropriately. Also, Auditors should charge and fix audit fee that commensurate with the audit assignment even  Regulators should ensure that the effective monitoring of audit fees of auditors are consistently in place to ensure that it is not too high or low relative to the audit engagement