Nexus Between Audit Quality And Financial Reporting Quality Of Listed Insurance Company In Nigeria

Abstract

This study investigated the nexus between audit quality and financial reporting quality among listed insurance companies in Nigeria over a twelve-year period (2012–2023). The target population consisted of 24 insurance firms listed on the Nigerian Exchange (NGX) as of December 31, 2023, out of which 18 were purposively selected based on the availability of complete data. Secondary data were extracted from the annual reports and accounts of the sampled firms. Employing a correlational research design, the study utilized multiple regression analysis to assess the data. The results revealed that audit independence exerts a positive and significant effect on financial reporting quality, thereby enhancing the reliability of financial statements. Conversely, audit type exhibited a negative and significant influence, indicating that the structural characteristics of the audit firm may shape reporting outcomes. Joint audits were found to have a positive and significant effect, contributing to enhanced credibility and reduced reporting errors. Similarly, audit tenure demonstrated a positive and significant impact, suggesting that longer auditor engagements foster a deeper understanding of company operations and thus improve reporting quality. Overall, the findings underscore the critical role of audit quality in strengthening financial reporting practices within Nigeria’s insurance sector. The study recommends that the independence of external auditors should be safeguarded and reinforced through robust regulatory frameworks to ensure credible and transparent financial reporting.