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Determinants of Audit Switching in Nigerian Healthcare Firms

Oghenekaro Igbru and Ogheneovo Catherine, Orife

Abstract

The study looked at factors that affected audit switching in Nigerian healthcare firms that were reported between 2010 and 2019. Using longitudinal data gathered from the companies' financial records over a range of years, the study employed an ex-post facto research approach. The firm assets base, management changes, leverage financing, and audit fees were employed in the study as explanatory variables, while audit switching was used as an outcome variable. A regression approach was used to analyse the gathered data. Nevertheless, in order to determine whether the data used were normal and to look for multi-colinearity, some preliminary analysis was done using descriptive statistics, correlation, and variance inflator analysis. According to the research findings, 68.69 percent of audit switches in Nigerian healthcare organisations are positively impacted by the independent variables that were chosen for the study. The particular result indicates that among Nigerian healthcare organisations that transfer auditors, the firm's asset base, a change in management, and leverage financing all have a favourable and significant. In Nigerian healthcare organisations, audit switching is positively but marginally influenced by audit fees. This suggests that the main factors influencing audit switching among healthcare companies listed on the Nigerian Exchange Group are firm asset base, management changes, and leverage financing. While audit fees do influence audit switching, their influence is not as great. Among other recommendations made by the report, shareholders could use and take into account the unique skill required before hiring an auditor in order to avoid audit switching.

Keywords

Audit Switching; Management ChangesLeverage Financing

References

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