Moderating Effect of Firm Value on the Relationship Between Auditor`s Quality and Earnings Managenmentt of Listed Companies in Nigeria

The motivation for this study is driven by the growing concerns over the credibility and transparency of financial reporting, alongside the persistent incidence of earnings management among listed firms in emerging economies such as Nigeria. Despite the implementation of corporate governance reforms and strengthened auditing standards, the recurrence of financial misstatements and audit failures evident in notable cases such as Cadbury Nigeria Plc continues to undermine investor confidence and cast doubt on the effectiveness of auditors in constraining opportunistic managerial behaviour. This study examines the moderating effect of firm value on the relationship between auditor quality and earnings management of listed companies in Nigeria. Specifically, it evaluates the effects of audit firm size, and audit fees on earnings management, as well as the moderating role of firm value in these relationships. The study adopts a correlational research design, covering a ten-year period from 2015 to 2024, with regression analysis employed for data analysis. The study used secondary sources of data collection and the population is one-hundred and sixty- four (164) listed companies on the Nigerian Exchange Group (NGX) as of December 31st, 2024. Findings revealed that audit firm size exhibit negative but insignificant effects. Conversely, audit fees have a positive and significant effect on earnings management, suggesting that higher audit fees may compromise auditor independence, leading to increased earnings management. Furthermore, firm value significantly moderates the relationship between whereas it positively and significantly moderates the effect of audit fees on earnings management. Furthermore, audit committees should be strengthened by ensuring they are independent, financially literate, and actively involved in overseeing the audit process, including the appointment, remuneration, and evaluation of auditors. Companies should also adopt transparent audit fee policies, ensuring that fees are reasonable and not structured in a way that creates economic dependence on clients.