AUDIT QUALITY AND EARNING MANAGEMENT OF LISTED INSURANCE COMPANIES IN NIGERIA

Abstract

This study examines audit quality and earnings management of listed Insurance companies in Nigeria over the period of 5 years (2015-2019). The study used simple random sampling technique to arrive at sample size of ten (10) insurance companies listed the floor of Nigerian Stock Exchange as at 2019. Secondary data extracted from annual reports and accounts of the sampled firms was analyzed using multiple regression. The regression result shows that audit firm size has a positive and significant impact on earnings management of the sampled firms, while joint audit service has a negative and significant impact on earnings management. However, auditor independence has negative and insignificant impact on earnings management. Therefore, the study recommends that regulators especially Security and Exchange Commission should encourage or make it as part of law to listed insurance companies in Nigeria to employs the service of both Big 4 audit firm and the local audit firm for audit assignment in order to safeguard firm’s earnings from management manipulation.