For correspondence:-
Received: 2 Feb. 2018 Accepted: 28 March 2018 Published: 31 March 2018
Citation: Auditor Independence and Audit Quality. Account Tax Rev 2003; 2(1):152-173 doi:
© 2003 The authors.
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Abstract
The study investigates the impact of auditor’s independence on audit quality of the insurance companies listed on the Nigerian Stock Exchange (NSE) from 2013 to 2016. The study utilised a sample size of 24 insurance companies which was determined using the Yamane formula. The study made use of secondary data which were sourced from the audited annual financial statements of the sampled companies. The data were analysed using descriptive statistics, correlation matrix and the panel regression technique. The findings show that there is a significant negative relationship between audit firm tenure and audit quality, while the relationship between audit firm rotation and audit quality was positive and statistically insignificant. Company size showed a strong positive relationship with audit quality. The study recommends that the relevant regulatory bodies should commence the enforcement of the proposed three-year professional audit tenure requirement to constrain lengthy auditor-client relationships which could impair auditor’s independence thereby reducing audit quality.
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