EFFECT OF AUDIT ATTRIBUTES ON ACCRUAL QUALITY OF MANUFACTURING FIRMS LISTED IN NIGERIA

Abstract

Audit attributes are crucial elements influencing the credibility and transparency of financial reporting in corporate governance. This study investigates the effect of audit attributes audit fee, audit tenure, audit committee independence, and audit report lag on accrual quality among manufacturing firms listed on the Nigerian Exchange Group from 2014 to 2023. Using panel data derived from 50 firms and applying a fixed effects regression model, the study assesses how these audit variables affect the accuracy and reliability of accrual-based earnings. The findings reveal that audit fee exerts a statistically significant negative effect on accrual quality (β = -0.012, p < 0.05), suggesting that increases in audit fees may compromise auditor independence or reflect audit complexities that lower earnings quality. Similarly, audit report lag also shows a significant negative impact on accrual quality (β = -0.004, p < 0.05), indicating that delays in issuing audit reports are associated with reduced financial reporting reliability. In contrast, audit tenure (β = 0.002, p > 0.10) and audit committee independence (β = 0.036, p > 0.10) exhibit no statistically significant effect on accrual quality during the review period. The findings emphasize the need for regulatory attention to audit-related factors that compromise earnings integrity. The study concludes that while some audit attributes significantly influence accrual quality, others may require complementary governance mechanisms or reforms to be effective within the Nigerian context. Strengthening auditor independence, ensuring timely audit processes, and enhancing audit oversight structures are essential to improving financial reporting quality in the manufacturing sector.