Determinants Of Audit Fees In Nigeria: An Empirical Analysis

Determinants Of Audit Fees In Nigeria: An Empirical Analysis

Chapter One

Preface

Background To The Study

The request for inspection services has been fete to be segmented into varyingsub-markets orsub-sectors of an frugality. Empirical experimenters have shown that the attention has been as the private sector request than in the public sector. Prices paid to the external adjudicators for inspection services differ significantly from that of the public sector. The base of determining these freights the statutory adjudicators admit from customer association has continued to attract the attention of experimenter especially in developing countries similar as Nigeria. The empirical findings attained this far as regard the determinants of inspection freights in developed husbandry have been mixed while the use of some variables have yielded positive correlations, others have rather remained inconclusive( Cobbin, 2002). principally, the substance of studying the determinants of inspection freights is to enhance or maximize shareholders wealth. This is because inspection freights paid by enterprises to external adjudicators for auditing the periodic fiscal statements, no doubt constitute a major expenditure; clearly similar expenditure doesn’t increase the value of shareholders directly from empirical findings.

The day to day handling of the affairs of a business reality no doubt is veritably much grounded on true relationship between the resource possessors( shareholders) and superintendences. The possessors put their trust on the operation with a view to adding wealth and conserving the durability of the business. The true reflection of the affairs of the association is always made known through the audited fiscal report. generally, the nature of the work to be performed by an external adjudicator will determine the inspection freights charge the customer establishment. The understanding of inspection figure determination is material to suppliers and guests of the inspection services assiduity( Che – Ahmad & Houghton, 1996). also, the pricing of these freights is veritably vital to request controllers. previous studies have shown inspection services might not be priced competitively due to high attention of the number of account enterprises( Che- Ahmad & Houghton, 1996). utmost of the studies conducted on inspection freights determinants have majorly been in developed countries of the world( Simon, Teo & Trompeter, 1992).

Studies regarding the inspection request and its actors( adjudicators and auditees) have been performed for further than 30 times( Chersan and Mihai, 2012). Accordingly, further and further determinants of inspection freights have been linked during this time and it has been settled that the impact of these factors on the figure position is substantially antithetical( Cobbin, 2002).

also, the empirical substantiation on inspection freights determinants have been concentrated on developed husbandry with mixed results given some figures of variables but without acceptable inquiries in developing countries similar as Nigeria. It’s against this reverse drop this study examined the determinants of inspection freights geste among quoted enterprises in the constructionsub-sector of the Nigeria Stock Exchange.

Statement Of The Exploration Problem

Number variables have been employed in advanced countries of the world to ascertain how they determine inspection freights. The results attained in these studies have been mixed and veritably antithetical( Cobbin, 2002). In the light of the ongoing inquiries, the following exploration questions for this study are

. What’s the relationship between inspection freights and auditee’s size among quoted enterprises in Nigeria?

2. What’s the relationship between inspection freights and auditee complexity among quoted enterprises in Nigeria?

3. What’s the relationship between inspection freights and auditee threat among quoted enterprises in Nigeria?

4. What’s the relationship inspection freights and auditee profitability among listed enterprises in Nigeria?

Objects Of The Study

The ideal of this study from the view point of the pupil experimenter is principally segmented into general and specific objects. The general ideal is on the determinants of inspection freights among quoted enterprises in Nigeria. still, the specific objects of the study are put forward as follows

To examine the relationship between inspection freights and auditee’s size among quoted enterprises in Nigeria.

To ascertain the relationship between inspection freights and auditee complexity among quoted enterprises in Nigeria.

To find out the relationship between inspection freights and auditee threat among quoted enterprises in Nigeria.

To examine the relationship inspection freights and auditee profitability among listed enterprises in Nigeria.

Statement Of Exploration Suppositions

In order to establish the factors serving as the determinants of inspection freights, the following null suppositions are specified as

Ho Auditee size doesn’t affect inspection freights among listed enterprises in Nigeria.

Ho There’s no relationship between inspection freights geste and auditee’s complexity among listed enterprises in Nigeria.

Ho Auditee threat doesn’t affect inspection freights among listed enterprises in Nigeria.

Compass Of The Study

This study examines the determinant of inspection figure geste in Nigeria. therefore, the study is demarcated to the banking assiduity in Nigeria. The period 2008- 2012 of all the banks listed in the Nigeria Stock Exchange( NSE).

Significance Of The Study

This study has theoretical and practical counteraccusations . This study surely will extend proposition by furnishing farther perceptivity on the factors that determine inspection freights among quoted banks in Nigeria. It’ll also give whether it indeed differ according to the factors determined to impact inspection freights. The auditing profession no doubt will find the outgrowth of this study useful in terms of knowing how to give criteria that serve the base of pricing inspection freights among quoted enterprises in Nigeria.

Limitations Of The Study

There’s no study or exploration accepted in any field that has no limitations. therefore, in this study, the limitations of the study include in acceptable exploration accoutrements dealing considerably on the subject matter and secondly there’s the problem of generalizing the outgrowth of the study to non fiscal institutions in Nigeria.