Audit Quality and Financial Reporting Quality among Quoted Non-Financial Firms in Nigeria

This study investigated the effect of audit quality on financial reporting quality in Nigeria. The audit quality was proxied with audit firm size, audit fee, audit tenure and audit committee financial expertise on financial reporting quality in Nigeria. This study adopted a stratified sampling technique to select 50 non-financial firms, which cut across 10 sectors from 2015 to 2022. The dependent variable (FRQ) was measured using accruals quality, while the explanatory variables were measured using; audit firm size, audit fee, audit tenure and audit committee financial expertise. The panel data set were analyzed using pooled, fixed and random effects estimator, while Hausman test and L.M test were used to select the best estimates. The results of this study revealed that audit firm size has a non-significant negative effect on financial reporting quality. The findings of this study also indicated that audit fee has a significant negative effect on financial reporting while audit firm tenure has a non-significant positive effect on financial reporting quality. Audit committee financial expertise also has a significant negative effect on financial reporting quality. The study also revealed that audit quality has a significant negative effect on financial reporting quality. Based on the findings of this study, the study recommended that elements of audit quality should be improved upon as this might improve the quality of financial reporting. Additionally, audit firms should give more attention to accruals quality as this constitutes the major element that signifies the quality of financial reports.