AUDIT QUALITY AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS SECTOR: EVIDENCE FROM NIGERIA

Abstract

A quality audit is a careful check of a company's work, systems, and goods. The study analyzed audit quality and financial performance of listed consumer goods sector in Nigeria. The specific objective was to investigate the effect of audit fee, audit size and auditor committee on financial performance of listed consumer goods sector in Nigeria. The theoretical framework for the study is the agency theory. The research design was ex-post facto research design. The research work used secondary data collected from financial statements of the listed consumer goods firms in Nigeria. The analysis was done using descriptive statistics, correlation analysis, fixed and random effect test and regression analysis for the test of hypotheses. The result of the study indicate that audit fee and audit size has significant effect on financial performance of listed consumer goods sector in Nigeria while and auditor committee has no significant effect on financial performance of listed consumer goods sector in Nigeria. The study therefore concludes that audit quality has positive and significant effect on financial performance of listed consumer goods sector in Nigeria. Amongst the recommendations is that consumer goods firms should determine the optimum audit fee that will not affect performance.  Consumer goods firms should improve the audit size below the mean value and consumer goods firms should not be in a hurry to assign more than one responsibility to each of the auditor committee since it has significant effect on return on asset.