Abstract:
This study investigates the effect of audit quality on financial reporting credibility in Lagos State, Nigeria. The objectives are to: (1) assess the impact of high-quality audits on the reliability of financial statements, (2) evaluate the role of audit quality in preventing financial misstatements, and (3) analyze the influence on stakeholder trust. A survey design was employed to collect data from auditors and corporate financial managers. The sample size, determined using Taro Yamane's formula, ensures representativeness. KPMG Nigeria was chosen as the case study due to its reputation for high audit quality. The reliability coefficient score of the survey was 0.89. Findings indicate that high-quality audits significantly enhance the credibility and reliability of financial reports, thereby increasing stakeholder trust. It is recommended that companies in Lagos State engage reputable auditors and prioritize audit quality to ensure credible financial reporting.
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