Okechukwu Okonkwo (PhD), Ibrahim Hassan Jimba (PhD), Daniel Emmanuel Kayode (PhD)


This study examines the effect of audit quality on earnings management of quoted conglomerate companies in Nigeria for the period 2012 to 2021. The study used ex post facto research design, the population of the study is the six (6) quoted conglomerate companies on the Nigerian Exchange Group (NGX) as at 31st December 2021, of which all the six (6) firms were taken as the sample size using census sampling technique. The technique for data analysis used was regression analysis. The study used dummy number of whether the audit firm is among The Big 4 audit firm to proxy audit quality. The proxy for earnings management was discretionary accruals, discretionary accruals was generated using modified Jones model. Finding reveals that audit fees have positive and statistically significant effect on earnings management, while audit firm rotation and big 4 audit firms indicate positive but statistically insignificant effect on earnings management. The study there concludes that audit fees have effect on earnings management. This study recommends that quoted conglomerate firms should ensure that external audit firms are well remunerated, this is because audit fees is associated with a decline on earnings management. In appointing external audit firm, client firms must ensure that the external audit firm is competent and is certified by relevant regulatory bodies to conduct the audit assignment.


earnings management, audit quality, big four, discretionary accruals

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