AUDIT FIRM CHARACTERISTICS AND FINANCIAL PERFORMANCE OF QUOTED INSURANCE COMPANIES IN NIGERIA
Abstract
This study examines the relationship between audit firm characteristics and the financial performance of quoted insurance companies in Nigeria. Specifically, audit firm size and audit firm rotation were used as measures of audit firm characteristics, while financial performance was assessed using net profit margin (NPM), return on assets (ROA), and earnings per share (EPS). Data were obtained from the audited annual reports of 19 insurance companies listed on the Nigerian Exchange Group for the period 2012–2023. Descriptive statistics, Pearson correlation, and panel least squares regression analyses were employed, with the Hausman test determining the appropriate model specifications. The results revealed that both audit firm size and audit firm rotation exhibited statistically insignificant relationships with all measures of financial performance. Audit firm size showed a positive but insignificant association with ROA and EPS, and a negative insignificant link with NPM, suggesting that large audit firms may contribute to better governance and credibility without necessarily improving short-term profitability. Similarly, audit firm rotation showed weak and insignificant effects on NPM, ROA, and EPS, indicating that frequent changes in auditors do not directly enhance performance outcomes. The study concludes that while audit firm characteristics may indirectly strengthen corporate transparency and stakeholder confidence, they are not decisive predictors of financial performance in Nigeria’s insurance sector. It recommends that regulators balance audit rotation requirements with continuity of expertise and that insurance firms prioritize auditor competence and industry specialization over firm size alone.
This article is available as a PDF download
Published in BUSINESS AND FINANCE JOURNAL
ISSN: 988-47878
This article appears in our peer-reviewed academic journal
View JournalRelated Articles
Explore similar research in our collection
IMPACT OF ANNUAL ALLOWANCE ON THE FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA
Ebenezer Foluso Oluwakayode,, Adebayo Olagunju (Ph. D), Aderemi Olalere Adebayo (Ph. D.)
Feb 14, 2026
Tax incentives is an inbuilt expansionary tax fiscal policy that has the capacity to boost econ...
View ArticleDEFICIT BUDGET FINANCING AND ECONOMIC GROWRH IN NIGERIA
IGONIDERIGHA ROSELINE PhD
Feb 13, 2026
As a nation grapples with development challenges, the strategic utilization of deficit budgets ...
View ArticleA DOCTRINAL AND INSTITUTIONAL REVIEW OF PERSONAL INCOME TAX LAWS IN NIGERIA (1960–2025)
BAMWA, BLESSING (PhD), OMOKEHINDE, JOSHUAL ODUTOLA, AKINYOMI, OLADELE JOHN, OLURIN, ENITAN OLUROTIMI
Feb 10, 2026
This study investigates the enduring structural and institutional constraints affecting Nigeria’s ...
View Article