Auditor Synergy And Financial Reporting Quality: Evidence From Listed Non-Financial Companies In Nigeria

Abstract

This paper examines the impact of joint audit on the financial reporting quality of Nigeria's listed non-financial companies. A joint audit refers to an engagement in which two or more independent audit firms are deployed to render a single opinion on the financial statements. Joint audits, it is claimed, strengthen audit quality through enhanced independence, reduced collusion, and improved error identification, while opponents highlight coordination issues and higher costs. Adopting an ex-post-facto research design, this study utilises annual report-based secondary data on Nigeria's listed non-financial companies from 2012 to 2022. Joint audit was operationalized as a binary variable where 1 indicates companies with joint engagements, and 0 where there is a single audit. Financial reporting quality was approximated using accrual quality based on the Modified Jones model. Panel regression estimated the hypothesis. The findings predict that joint audits are significantly correlated with FRQ, and the correlation is more pronounced when one of the auditors is from the Big 4. The work makes original contributions to the evolving debate on the relevance of joint audits in emerging markets and has policy implications for Nigeria's capital market regulators, corporate boards, and investors interested in enhanced audit quality and financial reporting credibility.