For correspondence:-
Received: 14 April 2018 Accepted: 25 May 2018 Published: 30 June 2018
Citation: Auditor’s Independence and Audit Quality: An Empirical Study. Account Tax Rev 2003; 2(2):15-27 doi:
© 2003 The authors.
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Abstract
The study examines the effect of auditor’s independence on audit quality of listed oil and gas companies in Nigeria over a period of ten (10) years (from 2007 to 2016). The sample size comprises of nine (9) out of the fourteen (14) companies listed in the downstream sector of the Nigeria Stock Exchange selected using purposive sampling technique. The study uses secondary data which were sourced from the audited annual financial statements of the sampled companies. The panel data were analyzed using descriptive statistics, correlation matrix and binary logit regression technique. The findings show that there is a significant positive relationship between auditor’s independence and audit quality, while the control variable of company size and leverage showed positive and negative relationship with audit quality respectively. The study recommends that the entire components of audit fees pricing and calculation should be regulated and disclosed in order to provide public insight into the financial dependence of an auditor on a client and whether the fee corresponds with the complexity of the audit assignment.
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