An Examination of the Impact of Auditor Rotation on Audit Quality: A Case Study of Nigerian Public Companies
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style:
- Recommended for :
- NGN 5000
Background of the Study
Audit quality remains a crucial aspect of financial reporting, corporate governance, and organizational transparency. One practice designed to improve audit quality is auditor rotation, which involves changing the external auditor after a specified period. This practice is mandated in many jurisdictions to prevent familiarity threats, maintain auditor independence, and enhance objectivity (Eze & Okafor, 2024). The rotation of auditors has been debated globally, with proponents highlighting its role in minimizing bias, while critics argue that it may disrupt institutional knowledge and reduce efficiency (Adegbite & Adamu, 2023).
In Nigeria, regulatory frameworks such as the Companies and Allied Matters Act (CAMA) and guidelines by the Financial Reporting Council of Nigeria (FRCN) emphasize the importance of auditor independence. However, concerns about auditor familiarity and compromised independence persist in Nigerian public companies, where long-term auditor-client relationships are common. This study explores the impact of auditor rotation on audit quality within Nigerian public companies, providing insights into its implications for corporate governance and financial integrity.
Statement of the Problem
Audit failures in Nigerian public companies have raised questions about the effectiveness of existing auditing practices and regulations. Prolonged auditor-client relationships are often cited as a key factor compromising audit quality, leading to biased reporting and potential financial misstatements (Olatunde & Afolabi, 2025). While auditor rotation is intended to address these issues, its implementation in Nigeria has been inconsistent, and its impact on audit quality remains unclear.
This study seeks to examine whether auditor rotation enhances audit quality in Nigerian public companies. By analyzing the experiences of companies with rotating auditors, the study aims to identify the benefits and challenges associated with this practice.
Objectives of the Study
-
To evaluate the relationship between auditor rotation and audit quality in Nigerian public companies.
-
To identify the benefits and challenges of implementing auditor rotation.
-
To recommend strategies for improving the effectiveness of auditor rotation in Nigeria.
Research Questions
-
How does auditor rotation affect audit quality in Nigerian public companies?
-
What are the benefits and challenges of auditor rotation in Nigeria?
-
What strategies can enhance the effectiveness of auditor rotation practices?
Research Hypotheses
-
Auditor rotation significantly improves audit quality in Nigerian public companies.
-
The implementation of auditor rotation poses challenges that may affect audit processes.
-
Effective strategies for auditor rotation lead to enhanced audit quality in Nigeria.
Scope and Limitations of the Study
The study focuses on auditor rotation practices in Nigerian public companies, with a particular emphasis on their impact on audit quality. Limitations include potential resistance from firms to disclose sensitive audit-related information and the relatively recent adoption of rotation practices in some companies.
Definitions of Terms
-
Auditor Rotation: The practice of changing external auditors periodically to maintain independence and objectivity.
-
Audit Quality: The extent to which an audit meets professional standards and provides reliable assurance to stakeholders.
-
Familiarity Threat: The risk of reduced auditor independence due to prolonged relationships with a client.
Related Project Materials
RELATIONSHIP BETWEEN POOR ANTI NATAL CARE INCIDENT OF MORTALITY IN JERE LOCAL GOVERNMENT AREA OF BORNO STATE
CHAPTER ONE
INTRODUCTION
-
-
EFFECTIVENESS AND EFFICIENCY OF PERSONAL INCOME TAX COLLECTION IN UYO LOCAL GOVERNMENT AREA
ABSTRACT
Tax collection has remained an issue of great concern to past and present governments of Niger...
Read moreADDRESSING THE SKILLS GAP THROUGH VOCATIONAL TRAINING PROGRAMS
Abstract: This study addresses the skills gap in Nigeria through vocational training progra...
Read moreEvaluating the Impact of Fiscal Reforms on Public Investment in Nigeria
Background of the Study
Fiscal reforms in Nigeria have been implemented to enhance transparency, improve...Read moreEvaluation of IoT‐Based Smart Intelligent Bus Scheduling for University Shuttle Services in Maiduguri LGA, Borno State
Background of the study
University shuttle services in Maiduguri LGA are critical for facilitating the daily commute of st...Read moreAn Examination of Customer Satisfaction with Online Banking Platforms: A Case Study of Wema Bank, Ogun State.
Background of the Study:
Online banking platforms have transformed the retail banking experience by providing customers with 24/7 access...
Read moreINFLUENCE OF EARLY CHILDHOOD EDUCATION ON REDUCING CARBON FOOTPRINT
ABSTRACT: This research investigates the influence of early childhood education on reducing carbon footprint among young children. Educating c...
Read moreTERRORISM AND ITS IMPLICATION ON GLOBAL SECURITY IN THE 21ST CENTURY
ABSTRACT
The research presented in this work highlights a complex and rapidly changing set of dynamics...
Read moreIMPACT OF AGE DIVERSITY ON ADULT EDUCATION PROGRAMS
Abstract: The research examines the impact of age diversity on adult education programs. This study aimed to explore how the inclusion of dive...
Read moreAn Assessment of Nurses' Knowledge and Implementation of Infection Control Measures in Dental Units at Ondo State Specialist Hospital
Background of the Study
Infection control is a critical aspect of healthcare delivery, particularly in settings such as dental units, whe...
Read more
-
