Audit Quality And Value Of Selected Manufacturing Firms: Nigerian Experience

This article uses an ex-post facto and cross-sectional research approach to investigate the effect of audit quality on the value of selected manufacturing companies listed on the Nigeria Exchange Group's floor for a ten-year period spanning 2011 to 2021. Using audit quality proxies such as auditor independence, audit firm size, audit group qualification, audit experience, and Tobin's Q, the study analyzes the value of listed companies in Nigeria. We used panel multiple regression to examine the non-homogeneity of firm data, which is why we used Hausman effect tests on secondary data taken from the annual reports and accounts of 34 manufacturing firms. These tests included descriptive analysis, correlation analysis, and a variance inflation factor. The Hausman specification test results indicated that the random panel Least Square (RPLS) regression solution was most acceptable for the dataset. There is statistically significant beneficial impact on the value of Nigerian manufacturing enterprises, according to the panel regression results that showed auditor independence had a favorable impact on firm value. Contrarily, audit experience has a non-significant negative correlation with Tobin's Q, whereas audit firm size and qualifications of audit group have a negligible positive correlation with the value of Nigerian manufacturers. Firms should work to improve auditor independence since it has a large and beneficial impact on audit conclusions. This study's findings imply that auditor independence has a considerable impact on stock market prices, consequently enhancing its monetary worth.