Family and Foreign Ownership and Audit Quality of Listed Manufacturing Firms in Nigeria

1
Abu Seini Odudu
Abu Seini Odudu
2
Dr. Joshua Okpanachi
Dr. Joshua Okpanachi
3
Dr. Adabenege O. Yahaya
Dr. Adabenege O. Yahaya
1 Federal University Dutsin-Ma

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The essence of audit quality is to assure the users that the financial statements contain no material misstatements. It show that the credibility and reliability of audited financial statements is what produce audit quality. This reliability and credibility are what assuring the investors, creditors and other resource providers that their investments are secured. However, the family and foreign ownership have the potential to affect the quality of an audit which in turn impair audit quality. This study examines the effect of family and foreign ownership on audit quality of listed manufacturing firms in Nigeria using secondary data extracted from published audited annual reports and accounts of manufacturing firms in Nigeria. Using 384 firm-year observations of 32 out of the total 59 listed manufacturing in Nigeria for 12 years, 2005-2016. Logistic regression technique was used for data analyses and test the hypotheses with the aid of STATA. The results show a positive significant effect of foreign ownership on audit quality, while inverse significant effect of family ownership on audit quality. The study recommends among other things, that there should be upward review of foreign ownership, and downward review of family ownership. It will encourage these group of owners to put in their best to effectively monitor the audit quality thereby giving assurance and confidence to other forms of ownership in the manufacturing firms that their investments are secured.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Not applicable for this article.

Abu Seini Odudu. 2019. \u201cFamily and Foreign Ownership and Audit Quality of Listed Manufacturing Firms in Nigeria\u201d. Global Journal of Management and Business Research - D: Accounting & Auditing GJMBR-D Volume 19 (GJMBR Volume 19 Issue D1): .

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Issue Cover
GJMBR Volume 19 Issue D1
Pg. 69- 79
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-D Classification: JEL Code: M42
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v1.2

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January 30, 2019

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English

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The essence of audit quality is to assure the users that the financial statements contain no material misstatements. It show that the credibility and reliability of audited financial statements is what produce audit quality. This reliability and credibility are what assuring the investors, creditors and other resource providers that their investments are secured. However, the family and foreign ownership have the potential to affect the quality of an audit which in turn impair audit quality. This study examines the effect of family and foreign ownership on audit quality of listed manufacturing firms in Nigeria using secondary data extracted from published audited annual reports and accounts of manufacturing firms in Nigeria. Using 384 firm-year observations of 32 out of the total 59 listed manufacturing in Nigeria for 12 years, 2005-2016. Logistic regression technique was used for data analyses and test the hypotheses with the aid of STATA. The results show a positive significant effect of foreign ownership on audit quality, while inverse significant effect of family ownership on audit quality. The study recommends among other things, that there should be upward review of foreign ownership, and downward review of family ownership. It will encourage these group of owners to put in their best to effectively monitor the audit quality thereby giving assurance and confidence to other forms of ownership in the manufacturing firms that their investments are secured.

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Family and Foreign Ownership and Audit Quality of Listed Manufacturing Firms in Nigeria

Abu Seini Odudu
Abu Seini Odudu Federal University Dutsin-Ma
Dr. Joshua Okpanachi
Dr. Joshua Okpanachi
Dr. Adabenege O. Yahaya
Dr. Adabenege O. Yahaya

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