Audit Quality as an Intervening Variable in Financial Performance of Quoted Manufacturing Companies in Nigeria
Lydia Emoshiogwe OSIKWEMHE & Y. M. DAMAGUN (Ph.D.)
This study assessed the influence of audit quality as an intervening variable in the financial performance of selected quoted manufacturing firms in Nigeria. The study used the secondary data from the annual reports of the firms. A Seven (7) year period was covered, from 2013 to 2019. The annual reports were retrieved from the websites of the manufacturing firms in Nigeria. A Single Regression Analysis (Ordinary Least Square, OLS) was conducted. The results of the study indicate that auditor’s independence, age of the audit firm, and audit fee have a positive significant relationship with financial performance of the selected manufacturing firms in Nigeria. However, audit size signed a negative and significant relationship with financial performance of quoted manufacturing firms in Nigeria. This study concluded that audit quality is seen as an intervening variable for financial higher performance but some of the variables of audit quality can have a negative influence on financial performance as seen in the Age of the Audit Firm. The study recommends that auditor’s independence should be increased greatly in order to enhance financial performance (Net profit margin) of firms and this can be done through improved internal control and integrity tests, management of quoted manufacturing firms should employ the services of experienced audit firm and not necessary the big four, management should go for an audit firm whose character and integrity cannot be questioned.
Audit quality, financial performance, manufacturing companies, Nigeria