Impact of ownership structure and corporate to governance mechanisms on audit pricing in Nigeria

• Main Author: Olarinoye, Salau Abdul Malik
• Format: Dissertation
• Language: English; English
• Published: 2013
• Subjects: HF5601-5689 Accounting
• Online Access: https://etd.uum.edu.my/5177/1/s810115.pdf; https://etd.uum.edu.my/5177/2/s810115_abstract.pdf; https://etd.uum.edu.my/5177/

This study investigated the impact of ownership structure and corporate governance mechanism on audit pricing in the samples from 73 public listed companies in Nigeria over a two-year period. Many studies have been carried out in developed countries and some emerging countries on audit pricing. However, very little attention has been paid to countries in the sub-Saharan Africa. This study extended prior audit fees model by investigating the impact of board ethnic diversity, foreign directors and the two board sub-committees (i.e. risk management committee and corporate governance committee), introduced in the 2011 Nigerian code of corporate governance, on audit pricing. Data for this study was gathered through secondary source in the form of annual reports (observation= 124) from 23 sectors of Nigeria economy. The hypotheses were tested with panel data regression analysis. The results revealed that foreign directors, risk management committee and corporate governance committee positively and significantly influence audit pricing. However board ethnic diversity does not have significant relationship with audit pricing. This findings support both the agency and resource dependency theories. The policy implication of this finding is that weak corporate governance mechanisms and ownership structure influence audit pricing. Therefore, the quality of audit is affected as well. This necessitates the need for policy makers to promulgate policies that will monitor audit pricing in the country