Effect Of Audit Market Concentration And Auditors’ Remuneration On Audit Quality Of Quoted Industrial Goods Firms In Nigeria

Abstract iterature is not unanimous on the exact effect of concentration of the audit market and the remuneration of auditors on the quality of audit particularly in the industrial goods firms in Nigeria. This study therefore examines the effect of audit market concentration and auditor’s remuneration on audit quality of quoted industrial goods firms in Nigeria. The concentration ratio of the big four audit firms, absolute audit market concentration and the audit remuneration were deployed as proxies for the independent variables while discretionary accrual was used as proxy for the dependent variable. Longitudinal panel research design was adopted in this study. Eleven quoted industrial goods firms were purposively selected out of the population of thirteen as at 31st December, 2022. Panel random effect regression model was found to be best fit for the analysis after the appropriate diagnostic tests. Econometric view version 10 was deployed as tool for the analysis. It was found that audit market concentration and auditor’s remuneration shows a negative insignificant effect on the quality of audit of industrial goods firms in Nigeria. It was therefore recommended that management of industrial goods firms in Nigeria should meticulously be conscious in their decision on effective, efficient and economic method to maximize the wealth of stakeholder as well as achieve the multifaceted needs of the firm.