AUDIT TENURE AND FINANCIAL REPORTING QUALITY: A STUDY OF LISTED NON-FINANCIAL FIRMS IN NIGERIA

Akwuobi, Bridget Udekwesili
Department of Accountancy
Nnamdi Azikiwe University, Awka
Mail: budekwesili1@gmail.com

Abstract

The study ascertained the effect of audit tenure on the financial reporting quality of listed non-financial firms in Nigeria. Ex-Post Facto research design was deployed in the study while the sample size is 23 listed non-financial firms. Data were collected from the annual reports of the purposive sample over a ten year period 2012 to 2021. Both descriptive and inferential analyses were carried out in the study. Ordinary Least Squares were used to estimate in the regression coefficients with which the null hypothesis was tested at 5% significance level. The findings revealed that audit tenure has a positive but non-significant effect on the quality of accruals of listed non-financial firms in Nigeria at 5% alpha level. The study recommends that given that the benefits of longer audit tenure may be offset by the risks of familiarity and complacency, companies should consider limiting audit tenure to enhance independence and objectivity. Regulators may also consider implementing mandatory audit rotation policies to reduce the risks of familiarity and bias.

Keywords: Audit tenure, Financial reporting quality and Non-financial firms