FORENSIC AUDITING AND FINANCIAL REPORTING QUALITY OF QUOTED FIRMS IN THE NIGERIAN SERVICE SECTOR
Keywords:
Accounting Conservatism, Accrual Quality, Earnings Management, Financial Reporting Quality, Forensic Auditing, Nigeria, Service FirmsAbstract
The study examined the effect of forensic auditing in improving the quality of financial reporting of service firms quoted on the Nigeria Exchange Group. The study was limited to seventeen (17) quoted service firms selected using purposive sampling technique. The data was sourced from the annual reports and accounts of the selected companies. Ordinary least square (OLS) regression was employed as the analysis tool to ascertain the effect of forensic auditing on the financial reporting quality of quoted service firm in Nigeria. The results showed that forensic auditing has no significant effect on accounting conservatism of quoted service firms in Nigeria (p-value =0.517). Forensic auditing has significant effect on earning management of quoted service firms in Nigeria (p-value = 0.001). Forensic auditing has significant effect on the accrual quality of quoted service firms in Nigeria (p-value = 0.009). In conclusion, the results of the study resonate with prior research emphasizing the positive contributions of forensic accounting to financial reporting quality. Given the non-significant impact on accounting conservatism, the study recommends continuous and targeted training programmes for forensic accountants in Nigeria to refine their skills and understanding of its application in diverse financial reporting contexts.
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