IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 9 NO. 2 2025
DOI: 10.56201/wjfir.v9.no2.2025.pg132.143

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Disclosure Quality and Audit Fee of Companies in Agricultural Sector in Nigeria

TONYE, Ogiriki, GERMAN, Woyengitarimi Rose

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Abstract

The study examined the effect of disclosure quality on audit fees of companies in the agricultural sector in Nigeria. The study specifically focused on two dimensions of disclosure quality: faithful representation and comparability of financial statements. Secondary data were obtained from the annual reports of five agricultural companies listed on the Nigeria Exchange Group (NGX) covering the period from 2019 to 2023, resulting in 20 firm-year observations. An ex post facto research design was employed, and the data were analyzed using panel least squares regression. The findings revealed that faithful representation, proxied by Earnings Before Interest and Taxes (EBIT), had a significant positive effect on audit fees (coefficient = 0.001322; p-value = 0.0002). In contrast, comparability, proxied by Return on Assets (ROA), showed a positive but statistically insignificant effect (coefficient = 489.9452; p-value = 0.3215). The model recorded an R-squared value of 0.7332, indicating that 73.32% of the variation in audit fees was explained by the independent variables. Based on the findings, the study recommended that companies strengthen their disclosure practices while regulatory bodies should consider developing sector-specific guidelines for audit fee determination. These recommendations aimed to promote fair and efficient audit pricing while encouraging high-quality financial reporting.

keywords:

Disclosure Quality, Audit Fees, Faithful Representation, Comparability

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