Effect Of Audit Fee On Financial Performance Of Quoted Consumer Goods In Nigeria

Authors: ARUMONA, O. Jonah (FCA, PhD); NEV, Mure Juliet
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Investors and other stakeholders of registered companies expect financial statements and annual reports to be true and fair about the position of the company. To achieve this, external auditors must ensure quality auditing. This study aimed to examine the effect of audit fee on financial of performance of quoted consumer goods in Nigeria. Secondary data was originally obtained from the published annual reports and accounts, and notes to the financial statements. The sample comprise 20 listed consumer goods on the NSE for the period of six (6) years from 2014 2019, using purposive sampling 10 was selected for the study. Ex-post facto design was adopted in carrying out this research. The dependent variable financial performance was proxy by return on asset (ROA) and the independent variable audit fee was proxy with audit transformation fee (AUDTF). The pooled data OLS regression technique fixed and random effect was employed which was analyzed via Eviews 10.The results show that the audit fee determines the financial performance of the selected companies. In particular, the study found that the audit debt transformation fee has significant positive effect on the return on assets of the quoted firms in Nigeria. The study concludes that the quality of return on asset is significantly enhanced by the audit transformation fee. It is recommended that companies should contract with auditing firms for a period of more than three years to promote the quality of audited financial reports.