Corporate Governance and Audit Quality; Evidence from Nigeria Breweries

Abstract

This study analyzed the effect of corporate governance on audit quality of selected brewery firms in Nigeria for a period of ten years spanning 2011-2020. The study employed ex-post facto and longitudinal research design. The secondary sources of data were collected from annual reports of the selected brewery firms quoted in their Nigeria Exchange Group and four (4) specific objectives and hypotheses were subjected to some preliminary data tests such as descriptive statistic, and Pearson correlation analysis and were analyzed using binary logistic regression analysis. Audit quality was used as the dependent variable, while board financial expertise, board size, board independence, and board meeting were used as the independent variables. Utilizing data from a sample of 40 firm year observations, we found that the proportion of non-executive directors and board size has positive and significant effect on audit quality. Based on the findings from the study, we therefore recommend that board size should be increased to a maximum number of six members for improved audit quality and quick decision making in relation to audited financial report. Also, Nigeria breweries should ensure that their board is composed of independent persons, with high level of integrity that can match words with action to improve their audit quality.