DETERMINANTS OF AUDIT FEES OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

This study empirically examined the determinants of audit fees of listed
consumer goods companies in Nigeria. The study employed a
descriptive approach where 14 out of 21 quoted companies in the
consumer goods sector were purposively sampled. The result of the
panel regression with the aid of STATA indicated that audit firm size is
a positive but insignificant factor in determining audit fees, auditor
tenure is negatively significant while return on asset is a significant
factor in determining audit fees. The result also revealed that leverage
is an insignificant determinant of audit fees of quoted consumer goods
companies in Nigeria. It is concluded therefore, that return on assets
and audit tenure can significantly determine audit fees while audit firm
size and leverage does not significantly determine audit fees of quoted
consumer goods companies in Nigeria. The study recommended that
insignificant consideration should be accorded to size of the audit firm
and the leverage of companies studied while determining audit fees
while adequate consideration should be accorded to auditors’ tenure
and return on assets of the companies as they significantly determine
audit fees.