Audit Firms’ Attributes and Financial Reporting Quality of Listed Oil and Gas Companies in Nigeria

Abstract

Financial Reporting Quality (FRQ) is key to providing various users with timely, useful and reliable information for making prudent, effective and efficient decisions. However, recurring financial scandals and reporting inconsistencies have raised concerns about the credibility of financial statements. Hence, the need to improve the financial information quality and strengthen auditing functions. This study examines the effect of audit firms’ attributes on Financial Reporting Quality of listed Oil and Gas companies in Nigeria for the period 2015 to 2025. Specifically, the study examined the effect of; Audit Fee, Audit Firm Independence, and Audit Firm Tenure on Financial Reporting Quality. The study adopted correlational design using panel data generated from ten (10) Oil and Gas firms which served as sample of the study. Random Effects Generalized Least Squares (GLS) regression method was used to analyze the secondary data extracted from the annual reports and accounts of the sampled firms with the aid of SPSS package. The results show that Audit Fee, Auditor independence and audit firm tenure have significant positive effect on Financial Reporting Quality. Overall, the study concluded that audit firm attributes affect financial reporting quality in the Oil and Gas companies. In view of the findings, it is recommended that auditors be adequately remunerated so as to enhance their performance, all stakeholders should, at all time, ensure the independence of the auditor and the Financial Reporting Council of Nigeria’s guideline on mandatory rotation of audit firms should be strictly adhered to.