AUDIT FIRM TENURE AND QUALITY OF FINANCIAL REPORT: THE NIGERIAN EXPERIENCE

Abstract

The purpose of the study is to conceptualizes the effect of audit firm tenure and quality of
financial reporting. There have been mixed results on the audit firm tenure and audit quality
from scholars. Some of the scholars are on the opinion that the prolonged engagement of an
audit firm may likely lead to close relationship amid with the audit firm and the client that will
decrease the ingredients in ensuring the trustworthiness
of the audit quality. While others scholars are of the thoughts that the shorter the audit firm
engagement it reduces the possible occurrence of fraud and enhances the quality of audit. In
contrary, other scholars believe that engaging an audit firm for a longer period reduces the
financial cost and it improves the quality of audit. The study recommended that standard setters
should harmonize the law regulating the rotation of audit firm tenure in line with global practice