- Sagin O. Super1*, Segun Adeniyi2
- Department of Accounting, Faculty of Management Sciences, Federal University Dutse, Jigawa Nigeria
Abstract: The main objective of this study is to examine the effect of audit quality on auditor’s liability of selected companies in Nigerian. While the specific objectives are; to determine the effect of audit fee on audit litigation and fine, to establish the effect of audit firm size on audit litigation and fine; and to ascertain the effect of auditor tenure on audit litigation and fine.
Secondary data was used for this study and the time frame for the study is six (6) years (2016 to 2021). The analyses of data were done by regressing the dependent variables through the ordinary least square (OLS) techniques. Using panel data of 25 consumer and conglomerate goods companies quoted on the Nigeria Exchange Group as at 31st December, 2021.
The study revealed that audit fees significantly and negatively affect audit litigation and fine of selected companies in Nigeria. Audit firm size significantly and negatively affects audit litigation and fine of selected companies in Nigeria. The negative relationship between auditor’s tenure and audit litigation and fine of selected companies in Nigeria is not significant.
The study therefore recommends among others that audit firms should increase their audit fees to reflect the level of effort and care taken during the audit process, Stakeholders should consider the size of the audit firm when evaluating the financial statements of firms.
Keywords: Audit Quality, Auditor’s Liability, Audit Litigation, Audit Fee, Audit Tenure etc.
