IMPACT OF AUDIT QUALITY ON FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

This study investigated the relationship between audit quality and financial performance of listed consumer goods companies in Nigeria by examining the effects of audit firm size, audit committee size, and auditor tenure on financial performance. An ex-post facto research design was used, relying on secondary data obtained from the annual reports of nine consumer goods firms listed on the Nigerian Exchange Group from 2015 to 2024. Panel regression analysis was conducted to evaluate the relationships between audit quality factors and financial performance, measured as net profit margin. The findings showed that audit firm size and auditor tenure have a significant positive and negative effect, respectively, on firms’ profitability, while audit committee size showed a negative but insignificant effect on firms profitability. This study recommends that consumer goods companies employ the services of reputable audit firms, such as the Big 4, to enhance audit quality and financial reporting reliability.