Audit quality as a determinant of financial performance in listed oil and gas companies in Nigeria

Abstract

The Audit Quality as a determinant of financial performance in listed Oil and Gas companies in Nigeria was investigated in this study from 2014 to 2023. Return on assets (ROA), return on equity (ROE), and Tobin's Q were used to measure financial performance, while audit size, audit tenure, audit firm industry specialization, and audit fees were used as proxies for audit quality. Panel regression models were used to analyze the data, which came from the annual reports of the sampled companies. The results show that audit tenure has a negative but negligible impact on financial performance, whereas auditor size, industry specialization, and audit fees have a positive and significant impact. Leverage had a negative correlation with financial performance, whereas firm size had a positive one. The study concludes that high audit quality enhances the profitability and market valuation of oil and gas companies in Nigeria by strengthening reporting credibility and investor confidence. It recommends that listed oil and gas companies should engage Big 4 auditors, ensure regular auditor rotation, invest in industry-specific audit expertise, and maintain transparency in audit fee determination.

Keywords

How to Cite

Mbatuegwu C. D.., Adebisi J. F.., Arua S. A.. (2025). Audit quality as a determinant of financial performance in listed oil and gas companies in Nigeria. DOU Journal of Management Sciences, 1(1), 1–15.