Title: Audit Quality And Financial Performance Of Quoted Oil And Gas Companies In Nigeria
Authors: Author: Ejovi Godbless
Volume: 10
Issue: 2
Pages: 1-19
Publication Date: 2026/02/28
Abstract:
The study investigated the impact of audit quality on the financial performance of the quoted oil and gas corporations in Nigeria during the 2015-2024 period on the basis of panel data of the five largest companies, including Seplat, Oando, Aradel, Conoil, and TotalEnergies. Audit quality was proxied by audit firm size, audit tenure, audit fees, and auditor independence, while financial performance indicators included return on assets (ROA), return on equity (ROE), and earnings per share (EPS). The descriptive analysis revealed that the variability in the variables was moderate, and initial diagnostics ensured that it was normative, no multicollinearity (VIF = 5), stationarity at first difference, and reasonable level of correlation. The panel regression tests showed that no heteroskedasticity (p > 0.05), no serial correlation (Durbin-Watson= 2.01), no cross-sectional dependency (p > 0.05). The Fixed Effects Model was the Favorite estimator because the Hausman test (kh2 = 11.42, p < 0.05) was in favor of it. Regression results revealed that audit firm size had a positive and significant effect on ROA (b = 0.214, p < 0.01), audit tenure significantly influenced ROE (b = 0.176, p < 0.05), and audit fees exerted a strong positive effect on EPS (b = 0.392, p < 0.01), while auditor independence showed an insignificant relationship with the performance variables (p > 0.05). Hypothesis testing accordingly rejected the null hypotheses for audit firm size, audit tenure, and audit fees, but failed to reject the null hypothesis for auditor independence.