AUDIT QUALITY AND FINANCIAL REPORTING TIMELINESS: PANEL EVIDENCE FROM LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA
DOI:
https://doi.org/10.61421/IJSSMER.2026.4304Keywords:
audit quality, financial reporting timeliness, audit report lag, auditor size, industry specialisation, emerging marketsAbstract
Financial reporting timeliness is a critical determinant of the quality and decision-usefulness of accounting information, particularly in emerging capital markets where information asymmetry is acute and institutional oversight remains uneven. Despite growing regulatory attention, listed industrial goods firms in Nigeria continue to experience significant delays in releasing audited financial statements, raising fundamental questions about the governance mechanisms particularly audit quality that should constrain such delays. This study examines the effect of audit quality on the financial reporting timeliness of listed industrial goods firms on the Nigerian Exchange Group (NGX) over the period 2016-2025. Audit quality is operationalized through four widely validated proxies: auditor size, audit fees, auditor tenure and auditor industry specialization. Financial reporting timeliness is measured by audit report lag (ARL). Using a balanced panel of 120 firm-year observations from 12 listed firms and employing linear mixed-effects regression to control for unobserved firm-level heterogeneity, the study finds that auditor size and auditor industry specialisation exert statistically significant negative effects on ARL, indicating that Big 4 and industry-specialist auditors are associated with meaningfully shorter reporting delays. Audit fees exhibit a positive and significant relationship with ARL, reflecting complexity-driven audit duration rather than inefficiency. Auditor tenure is positively but insignificantly related to ARL, suggesting that familiarity effects are offset by independence concerns. The model explains 73% of the variance in ARL. The findings carry important policy implications for Nigerian regulators, audit practitioners and corporate governance reformers seeking to improve the timeliness and credibility of financial reporting in emerging market contexts.
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