Does CEO Tenure Encourage Opportunistic Financial Reporting? Moderating Role of Audit Firm Tenure on Earnings Quality

This study investigates whether CEO tenure influences opportunistic financial reporting practices among publicly listed firms in Nigeria and examines how audit firm tenure moderates this relationship. Drawing on agency theory and institutional theory, we analyze 2,220 firm-year observations from 148 Nigerian Stock Exchange-listed companies spanning 2010-2024. Using fixed-effects panel regression models, we find that extended CEO tenure significantly increases earnings management behaviours, suggesting entrenchment effects that compromise financial reporting integrity. However, longer audit firm tenure attenuates this negative relationship, providing evidence that auditor-client familiarity can enhance monitoring effectiveness in emerging market contexts. Our findings contribute to governance literature by demonstrating the dual nature of tenure effects and offer practical implications for regulatory bodies, corporate boards, and investors navigating agency conflicts in developing economies. The study provides empirical support for tenure limitation policies and highlights the critical role of audit quality in constraining managerial opportunism.