Value Relevance of Audit Quality of Listed Manufacturing Companies in Sub-Saharan African Countries
Sunday Amos ADEUSI
Audit quality improves the association between accounting information and market valuation which can help determine the effectiveness of auditing as a governance mechanism in emerging markets for predictive value of firm. Thus, the study investigate value relevance of audit quality of listed manufacturing companies in sub Saharan African counties. The study employs quantitative and ex post facto research design and deploys Mixed-Effects Maximum Likelihood (ML) regression model to dissect secondary data extracted from the audited financial statement of companies. The results reveal that all the independent variables proxy with audit firm quality (AFQ), audit committee size (ACS), audit committee diligence (ACD) and audit committee gender diversity (ACGD) are statistically significant at level of 5% with the dependent variable (share price). This depicts that all the variables are value relevance of accounting information of the manufacturing companies of this sub-Saharan counties. And concludes that high-quality audits improve the credibility of reported earnings and financial statements, thereby strengthening the association between accounting information and market valuation
Keywords: Audit quality, efficient market hypothesis, inspired confidence theory, value relevance