Title: Exploring the state of the audit market in Nigeria

Authors: Etumudon Ndidi Asien

Addresses: Department of Accounting and Finance, Faculty of Business and Management Sciences, Federal University, Otuoke, P.M.B. 126 Yenagoa, Bayelsa State, Nigeria

Abstract: This paper attempts a holistic exploration and analysis of the audit market in Nigeria, after constructing six stylised audit regimes. Data are collected from annual reports and audited financial statements of 83 quoted firms for 2011-2013. Using Herfindahl-Hirschman Index to examine concentration of the Nigerian audit market, the paper finds that the market is highly concentrated around Big 4 auditors. T-tests for differences in means of auditors' remuneration indicate significant differences exist between Big 4 and other single audit regimes as Big 4 auditors receive higher remuneration than other single audit regimes. T-test result shows that joint audit is more costly than single audits. Using cross-sectional multiple regressions and panel data analyses methods to investigate whether Big 4 auditors are more likely to audit large and mature clients than other single audit regimes, findings suggest that auditors' remuneration is positive and significantly related to age and size of firms for Big 4 auditors (and a pooled sample), after controlling for industry membership.

Keywords: auditing; joint audit; audit quality; Nigeria; Herfindahl-Hirschman; auditors; auditor remuneration; Big 4; independent samples test; multivariate analysis; market share; concentration; firm age; firm size.

DOI: 10.1504/AJAAF.2014.069846

African Journal of Accounting, Auditing and Finance, 2014 Vol.3 No.4, pp.287 - 307

Received: 13 Mar 2015
Accepted: 18 Mar 2015

Published online: 13 Jun 2015 *

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