EFFECT OF AUDIT QUALITY ON MARKET PERFORMANCE OF SELECTED LISTED COMPANIES IN NIGERIA: MODERATING ROLE OF AUDIT COMMITTEE

Abstract

This study investigated effect of audit quality on market performance of listed agricultural and consumer goods companies in Nigeria; the moderating role of audit committee. Audit quality was measured by Audit Firm Size (AFS) and Audit Fees (AF), Audit committee was measured by audit committee financial expertise, the study also interacts audit committee financial expertise with Audit Firm Size (AC*AFS) and audit fees (AC*AF). Market performance is measured by market price per share (MPS). The study uses longitudinal research design, and the data for the study were obtained from audited annual report of the sampled companies for the period of 7years (2011-2017) with a total of 112 observations and the multiple regression analysis were used for data analysis. Using fixed effect model, findings show that audit committee significantly moderates the effect of audit quality on market performance. Specifically, AFS and ASF*AC has no significant effect on MPS while AF, the moderator variable AC and the interaction variable AF*AC have significant effect on MPS. The study recommends that regulatory authorities should strengthen and enforce disciplinary measures to ensure that objective and realistic opinion is issued by the external auditors and that majority members of the audit committee should be financial experts since audit committee financial expertise moderate the effect of audit quality on market performance of listed agricultural and consumer goods companies in Nigeria.