Effect of audit quality on shareholders’ earnings of listed industrial goods firms in Nigeria, 2012-2018

This study examined the effect of audit quality on shareholders‘ earnings of listed industrial goods firms in Nigeria. Specifically, the study examined the effect of auditor‘s independence, audit firm size and auditors‘ tenure on shareholders‘ earnings of listed industrial goods firms in Nigeria. The study adopted Ex post-facto research design and panel data regression model with the aid of E-view 9.5 statistical software which was used to analyze data generated from 2012-2018. The study found that auditors‘ independence and audit firm size have positive and significant effect on shareholder‘s earnings of listed industrial goods firms in Nigeria while auditors‘ tenure has a negative and insignificant effect on shareholders‘ earnings of listed industrial goods firms in Nigeria. The implication of the finding is that investors and other stakeholders should pursue financial reports of the firms audited by independent auditors and the large audit firms (Big 4), paying attention to the length of audit tenure, as longer audit tenure may diminish the quality of audit, and hence the reliability of reported earnings. Keywords: Audit quality, Firm size, Auditor tenure, Shareholders, Earnings per share