IFRS Adoption and Audit Quality in Nigeria: The Conditional Effect of Auditor Industry Specialization

  • Ahmad Bukola Uthman Department of Accounting, Al-Hikmah University, Ilorin
  • Abdulai Agbaje Salami Department of Accounting, Al-Hikmah University, Ilorin
Keywords: Audit Quality, Auditor industry specialization, IFRS adoption, conflict theory


Incessant audit mistakes as unveiled by the Financial Reporting Council of Nigeria (FRCN’s) sanction on audit firms as well as the consequential ligation of the ‘prestigious’ audit firms suggest the need to examine the quality of audits. This aim of this study is to find out how the relationship between audit quality and International Financial Reporting Standards (IFRS) Adoption is moderated by auditor industry specialization of listed companies in Nigeria. The study drew data mainly from secondary sources. That is, extracted data from financial reports of 52 listed companies in Nigeria covering periods between 2005 and 2019 were used. The period covers both pre IFRS and IFRS period to ensure a balanced spread of data across both periods across all industries. The overall observation totaled 517 and the analysis of data was carried out with the use of longitudinal econometric models. The findings of the study are: (i) adoption of IFRS significantly affects audit quality suggesting an improvement in audit quality due to IFRS adoption.  In the financial services industry, the results indicate that adoption of IFRS does not significantly affect audit quality (ii) IFRS adoption led to significant reduction in the audit quality of both financial and non-financial services industries due to auditor industry specialization. The study recommends, among others, the need for the regulatory authorities to include oversight on auditor industry specialization so as to ensure it achieves a desired outcome of improved audit quality and ensure students are trained to acquire accounting skills in their industries of interest to further improve audit quality.


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How to Cite
Uthman, A. B., & Salami, A. A. (2021). IFRS Adoption and Audit Quality in Nigeria: The Conditional Effect of Auditor Industry Specialization. Global Journal of Accounting, 7(2), 80-98. Retrieved from http://gja.unilag.edu.ng/article/view/1321