International Journal of Social Sciences and Management Review

EFFECT OF AUDITOR TENURE ON AUDIT QUALITY IN NIGERIA

Authors: Isito Ogheneochuko Emmanuel & Patrick Uzoka

ABSTRACT

In Nigeria, the study looked into the link between auditor tenure and audit quality. We hypothesized that audit quality would rise with audit firm tenure due to increased auditor competence and fall with audit firm tenure due to decreased independence. Whether the link between audit firm tenure and audit quality is a concave, convex, or linear function of audit firm tenure is determined by the overall effect of these two counterbalancing factors across audit firm tenure. Data was gathered from annual reports of selected Nigerian listed companies from 2000 to 2018. The connection between auditor tenure and audit quality was investigated using the regression approach. In this study, the Quadratic Model was used. Firm size, operating cash flow, firm growth, auditor type, firm age, and client relevance were all included as control variables alongside auditor tenure. According to the findings, audit quality improves with auditor tenure. The coefficient on long auditor tenure, on the other hand, was determined to be both negative and significant. As a result, we urge that auditors be encouraged to learn about their client’s businesses and industries and that policies be put in place to promote independence, objectivity, and professional skepticism.

Keywords: Auditor Tenure, Audit Quality, Firm Size, Operating Cash Flow, Firm Growth, Auditor Type, Firm Age, Client Relevance

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