AUDIT QUALITY AND CONCEPT OF GOING CONCERN IN QUOTED NON-FINANCIAL FIRMS IN NIGERIA
- Project Research
- 1-5 Chapters
- Abstract : Available
- Table of Content: Available
- Reference Style: APA
- Recommended for : Student Researchers
- NGN 3000
ABSTRACT
The objective of the study is to examine audit quality and concept of going concern in quoted nonfinancial companies in Nigeria. Arguments abound that going concern opinion is issued if auditors have a doubt about financial condition of a company. However, provision of going concern audit opinion may worsen the company in terms of gaining public trust and may even indicate bankruptcy, and that is why this study aims to explore audit quality attributes that affect auditor’s going concern opinion. Based on the principal-agent theory we employ audit quality proxies which include Audit Firm Size, Audit Tenure, Audit Fee, Joint Audit, and Audit Delay also representing the independent variables and Altman Z scores index (dependent variable) as proxy for accounting going concern. This study employed secondary data obtained from related companies annual reports published by the Nigerian Stock Exchange. The population of this study includes all nonfinancial companies listed on the floor of the Nigerian stock exchange market during a 10year period ie between 2011 and 2020. The sample after adopting Krejcie and Morgan sample size computation technique consist of 84 companies. In this study, three econometric models which relates to firms belonging to qualified audit opinion, unqualified audit opinion and a combination of both were specified. The collated data set were analysed using binary logistic and least square dummy variable regression estimation technique performed in statistical analysis software, Stata 16.0. The results indicate that audit firm size, audit tenure, and audit fee have statistically significant effect on going concern concept. However, joint audit and audit delay show no statistically significant effect on going concern concept of listed non-financial firms in Nigeria during the period under review. Based on the study outcome, the need to hire audit services provided by big four audit firms such as Akintola Williams (Deloitte), Ernst & Young, KPMG, and Price Waterhouse Coopers is recommended. Such audit firms with international affiliation are associated with higher quality, hence will strive to maintain the quality of its audit so it does not lose the trust of clients and ultimately help the firm maintain unqualified audit opinion position. We also recommend that Enlonged tenure system for engaged audit firms should be considered. We find that such policies when implemented will provide brighter chances to the audited firm to get an unqualified audit opinion. This is enabled from the fact that the engaged auditor is given apple time to understand the clients’ firm better and more comprehensively. A review of higher service fee (audit fee) paid to engaged auditors should be considered if possible reviewed downwards. We find that higher audit fee paid by these firms to these auditors erodes the independence of the auditor thereby making the auditors prone to bias judgement which eventually erodes the company’s going concern status. Corporate policies that may provide for joint audit services should be less considered. Instead, more attention should be paid to hiring the services of Big four audit firms as this has been empirically proven to be a tool for improving financial statement quality. Although the variable of audit delay reveals an insignificant effect on accounting going concern concept, we still recommend that best practice rule should be enforced. Auditor should be able to give opinion on the financial statement within the regulatory framework of 90 days after which the directors signed.
Related Project Materials
AN INVESTIGATION INTO THE PROBLEMS AND PROSPECTS OF MARKETING NIGERIAN MADE COMPUTER SOFTWARES
Background to the Study
Made-in-Nigeria software is a term used to describe software that was developed...
THE EFFECTIVENESS OF BLENDED LEARNING APPROACHES IN TECHNICAL EDUCATION
Abstract: The effectiveness of blended learning approaches in technical education is essent...
SOCIAL CONSEQUENCES OF BROKEN HOMES ON THE ACADEMIC PERFORMANCE OF CHILDREN: A CASE STUDY OF IGUEKHIHO COMMUNITY IN OVIA SOUTH WEST LOCAL GOVERNMENT AREA OF EDO STATE
ABSTRACT
This research work was carried out in order to find out the effect of broken homes on the acad...
PURCHASING OF BANKING AND FINANCIAL SERVICE
ABSTRACT
This study was carried out on the purchasing of banking and financial services in Nigeria, using Eco Bank as ca...
COMPETENCY IMPROVEMENT NEEDS OF TECHNOLOGY TEACHERS IN THE IMPLEMENTATION OF BASIC TECHNOLOGY
ABSTRACT
The study was carried out to determine competency improvement needs of technology teachers in the implementation of basic techno...
ACCOUNTING FOR PUBLIC PENSIONS AND RETIREMENT BENEFITS
ACCOUNTING FOR PUBLIC PENSIONS AND RETIREMENT BENEFITS: This research aims to (i) analyze the current practices in accounting for public pensions a...
SOME NEUROPHARMACOLOGICAL STUDIES OF EXTRACT AND FRACTIONS OF CRINUM ZEYLANICUM(L.) (AMARYLLIDACEAE)BULB IN LABORATORY ANIMALS
ABSTRACT
Crinum zeylanicum is a medicinal plant used in folk medicine for management of general debility, infantile seizures and pain. So...
PUBLIC SENTIMENT AND ITS IMPACT ON GOVERNANCE REFORMS IN NIGERIA (A CASE STUDY OF ENDBADGOVERNANCE PROTEST IN NIGERIA)
PUBLIC SENTIMENT AND ITS IMPACT ON GOVERNANCE REFORMS IN NIGERIA (A CASE STUDY OF ENDBADGOVERNANCE PROTEST IN NIGERIA)
Chapter One: Intro...
CRITICAL EVALUATION OF WOMEN AND RURAL DEVELOPMENT
ABSTRACT
This study examines the “critical evaluation of women and rural development”, a case study of Ideat...
ASSESSING THE EFFECT OF POST COVID-19 PANDEMIC ON TERTIARY INSTITUTIONS
ABSTRACT
This study was carried out on the assessment of the effect of post covid-19 pandemic on tertia...
