Impact of Ownership Structure on Audit Quality of Listed Insurance Firms in Nigeria

Abstract

As a consequence of insufficient audit quality, corporate financial reporting problems have increased in the last decades. This has also been ascribed to the businesses' ownership structure. As a result, from 2009 to 2018, this study looked at the influence of ownership structure on audit quality of listed insurance firms in Nigeria. Secondary data was gathered from annual reports of 18 insurance companies during the period under review. The data was analyzed using logistic regression and results revealed that institutional ownership, block-holding ownership, and foreign ownership have a positive and significant impact on the audit quality of listed insurance firms in Nigeria, whereas managerial ownership has a positive, but insignificant impact. The research concludes that institutional investors' monitoring effectiveness will increase the chances of engaging Big 4 audit firms. As a result, the research suggests that the board of directors of insurance companies should promote institutional investment in order to strengthen managerial oversight and audit quality. Regulatory authorities and policymakers of listed insurance corporations should also establish atmosphere that encourage international investment in Nigeria.