CORPORATE GOVERNANCE AND AUDITORS’ SWITCHING BEHAVIOUR: EVIDENCE FROM QUOTED NON-FINANCIAL COMPANIES IN NIGERIA

Abstract

Auditor switching has been a major issue in research to be addressed to improve audit quality for decades due to the corporate scandals experience in Enron and WorldCom. The main objective of this study was to examine the role of corporate governance in enhancing auditor switching behaviour in Nigeria. The population for the study consisted of all the onehundred and seventy (170) non-financial quoted companies in the Nigerian Stock Exchange (NSE) as at 31st December 2018. The companies for the population have the responsibility to publish their financial statements for six consecutive years for the period 2012- 2018. Secondary data used for the study was collected from the sampled quoted non-financial companies in the Nigerian Stock Exchange from 2012 to 2018. The logistic regression technique was used to test the formulated hypotheses. The results showed that board size exerted a positive and insignificant effect in enhancing auditor’s switching, board independence exerted a negative and insignificant effect in enhancing auditor’s switching, board meetings exerted a negative and insignificant effect in enhancing auditor’s switching and audit committee existence exerted a positive and insignificant effect in enhancing on auditor’s switching. It was concluded that corporate governance is used to monitor whether outcomes are by plans and to motivate the organization to be fully informed to maintain organizational activity and curtain the issue of auditor's switching among quoted companies. The study recommended that the management of quoted non-financial companies in Nigeria should consider the presence of non-executive directors and the frequency of board meetings as it reduces the level of auditor's switching.