Independence of Statutory Auditor and Reliability of Financial Statements: Evidence from Listed Manufacturing Companies in Nigerian
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Keywords

Financial statements, Reliability, Statutory auditors, Independence, Financial reporting, Auditing,Financial statements, Investors.

How to Cite

Olaoye, S. A., Aguguom, T. A., Safiriyu, S. E., & Abiola, T. . (2019). Independence of Statutory Auditor and Reliability of Financial Statements: Evidence from Listed Manufacturing Companies in Nigerian. International Journal of Asian Social Science, 9(8), 436–449. https://doi.org/10.18488/journal.1.2019.98.436.449

Abstract

This study examined the impact of the independence of statutory auditor on the reliability of financial statements of the manufacturing companies in Nigeria. The study adopted a survey research design, using data collected from a structured online questionnaires administered to the shareholders of listed companies in Nigeria. The population of the study comprised all shareholders in Nigerian listed companies, 150 structured questionnaires were randomly distributed from which 137 were retrieved from the respondents. The gathered data were analyzed using descriptive and inferential statistics. For unwavering quality, the Cronbach alpha was utilized to test the dependability of the instrument. The paper found that independence of statutory auditors had a positive significant effect on reliability of financial statements (RFS) (F= 9.018, Adj. R2 = 0.191, p < 0.05). Also that Non-financial interest (NFI) had a positive insignificant effect on RFS, AdjR2 = 0.195; F-Stat. = 9.255; P = 0.000. Audit tenure (AT) also had a positive significant effect on RFS, AdjR2 = 0.078; F-Stat. = 3.877; P-value = 0.005. While Non- audit services (NAS) exhibited a positive significant effect on RFS, AdjR2 = 0.118; F-Stat. = 5.568; P-value = 0.000. Based on the findings, the study recommended that audit firms should regulate the number and length of non-audit services rendered to companies they serve as external auditor and also undergo a frequent review on financial statements where their clients have interest in order to reduce self-review and self-interest threat.

https://doi.org/10.18488/journal.1.2019.98.436.449
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