AUDIT QUALITY ATTRIBUTES AND FINANCIAL PERFORMANCE: A PANEL STUDY OF QUOTED FIRMS IN NIGERIA

This study examines the influence of audit quality on financial performance of 40 quoted non-financial firms in Nigeria for 10 years from 2009 to 2018. Audit quality measures adopted include audit fees, audit committee experience, audit committee financial expertise, auditor tenure, and audit firm size while operating cashflow was adopted to proxy financial performance. Secondary data, panel in nature, were gathered from annual reports and audited accounts of these firms that were selected using a stratified sampling technique. Thereafter, ordinary least squares (OLS) was adopted to estimate the model specified for this study. The result revealed significant and positive influence of audit tenure and audit firm size on operating cashflow. Further, there were insignificant and positive relationship between audit fees, audit committee experience and operating cashflow, as well as insignificant and negative relationship between firm size and operating cashflow. Consequently, this study recommends a sustained audit tenure regulation among professional firms, alongside continuous engagement of the Big4 firms to improve on firms' financial performance. In addition, small and medium local indigenous professional accounting firms should adopt an expansion strategy, through mergers and acquisition to improve capacity, thereby ensuring consideration for sustained engagement by large firms (clients).