Original Research Article | OPEN ACCESS
Moderating Effect of Audit Quality on Corporate Attributes and Financial Performance of Listed Manufacturing Firms in Nigeria

Murtala Abdullahi1 , Gloria Pam Dachomo2 , Maryam Ahmed Jibril3 , Blessing Duniya4

1-4Department of Accounting, Kaduna State University, Kaduna Nigeria.

For correspondence:-  Murtala Abdullahi   Email: murtalaabdullahi70@gmail.com

Received: March 26, 2020        Accepted: March 31, 2020        Published: March 31, 2020

Citation: Abdullahi M, Dachomo GP, Jibril MA, Duniya B. Moderating Effect of Audit Quality on Corporate Attributes and Financial Performance of Listed Manufacturing Firms in Nigeria. Account Tax Rev 2020; 4(1):13-29 doi:

© 2020 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..

Abstract

Most of the previous studies on organisational attributes and financial performance of firms examined the direct relationship without examining the indirect relationship with the financial performance of firms. This paper examined the moderating effect of audit quality on corporate attributes and financial performance of listed manufacturing firms in Nigeria for the period 2004 to 2018. Secondary data was obtained from a population of six manufacturing firms through their annual reports and accounts. Corporate attributes as an independent variable were proxied by leverage, liquidity and tangibility as well as audit quality used as moderating variable.

In contrast, the return on assets was used to represent financial performance as the dependent variable of the study. The study adopted a random effect multiple regression techniques in analyzing the data. The findings revealed that leverage has a significant positive impact on financial performance, liquidity and tangibility has insignificant negative impact on the financial performance of the firms, while the joined interaction of leverage and audit quality as moderating variable of the study has a significant negative effect on the financial performance of the firms. It is recommended that the firms should increase the level of leverage in their company since it was found that leverage has a significant positive relationship with the firms’ financial performance as well as proper liquidity and non-current assets management.

Keywords: Leverage, Liquidity, Tangibility, Audit Quality and Financial Performance


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