IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF SOCIAL SCIENCES AND MANAGEMENT RESEARCH (IJSSMR )

E-ISSN 2545-5303
P-ISSN 2695-2203
VOL. 10 NO. 7 2024
DOI: 10.56201/ijssmr.v10.no7.2024.pg144.156

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Audit Tenure, Firm Characteristics and Profitability of Publicly Listed Companies in Nigeria

ABARIKA, Christian

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Abstract

This study examined the extent to which, audit tenure and firm characteristics influence the level of profitability of listed companies in Nigeria. Ex-post facto research design and panel data of eleven (11) listed healthcare, hospitality and ICT firms were employed. The variables of audit tenure (disaggregated into long and short audit periods), characteristics of firm (age and size) and profitability (earnings per share) were obtained and computed from the annual reports and accounts of the healthcare, hospitality and ICT firms from 2013-2023. The obtained data were analyzed via descriptive, diagnostic and inferential statistical techniques. The fixed and random effects panel regression results indicated that audit tenure and firm characteristics significantly influence profitability level of the listed healthcare, hospitality and ICT companies. On the other hand, descriptive results suggest that while short audit tenure appears to drive profitability the most, long audit tenure was found to be considerably low in predicting profitability level of listed healthcare, ICT and hospitality companies in Nigeria. In view of the findings, the study recommends among others that listed companies should discourage prolonged audit tenure because it affects the level of profitability negatively. Also, there is the need for listed companies to increase the level of total assets by committing more funds to asset investments to enable them persistently increase and have unwavering profitability.

keywords:

Audit tenure; Firm characteristics; Profitability; Listed companies; Nigeria

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