Does High-Quality Auditing Enhance Transparency in Financial Reporting among Listed Firms in Nigeria?

This study investigates whether high-quality auditing enhances transparency in financial reporting among listed firms in Nigeria, covering 148 firms over the period 2011–2025. Drawing on agency theory, signaling theory, and stakeholder theory, the paper examines the relationship between audit quality, measured by auditor independence, audit fees, auditor tenure, and audit report timeliness, and financial reporting transparency, proxied by earnings quality, voluntary disclosure index, and accounting conservatism. The study employs an ex post facto research design with panel regression analysis, incorporating both fixed effects and random effects estimations. Ten control variables are introduced: firm size, leverage, profitability, growth opportunities, board independence, audit committee expertise, ownership structure, firm complexity, industry type, and Big 4 audit firm presence. Diagnostic and post-estimation tests—including the Hausman specification test, Breusch-Pagan Lagrange Multiplier test, variance inflation factor analysis, modified Wald test for heteroskedasticity, and Wooldridge test for serial correlation—are conducted to ensure robustness. Results from the panel regression indicate that audit quality significantly and positively enhances financial reporting transparency among Nigerian listed firms. Specifically, auditor independence and audit fees demonstrate statistically significant positive associations with financial reporting transparency at the 1% level. Auditor tenure exhibits a negative but statistically insignificant relationship, while audit report timeliness is significantly and negatively associated with transparency, suggesting that delays erode reporting quality. Among the control variables, firm size, profitability, board independence, audit committee expertise, and Big 4 audit firm presence are significantly associated with transparency. The findings carry important implications for regulators, audit professionals, corporate boards, and investors operating within Nigeria's capital market. The paper contributes to knowledge by offering longitudinal evidence from an emerging economy, addressing methodological gaps in prior studies, and integrating a comprehensive set of control variables often ignored in the Nigerian context. The study recommends strengthening regulatory oversight of auditor independence, mandating audit firm rotation, and incentivizing investments in audit committee expertise to bolster financial reporting transparency.