CORPORATE GOVERNMENT VARIABLES, AUDIT FEES AND NIGERIAN CORPORATE ENVIRONMENT: AN IMPACT –EVALUATE TEST

Abstract

Audit fees are determined by several factors many of which have been traced to the nature of Audit firms. Few academic studies exist on the internal-client characteristics as to determinant of audit fees charged especially in Nigeria corporate landscape. This study examines the effect of corporate governance practices on audit fees charged in selected distributive firms within Nigeria corporate environment.

Data for this study made up of three (3) basic corporate operating characteristics such as, Board size, board independence and audit committee independence which constitutes the explanatory variables are gathered from annual reports and accounts of selected Nigerians distributive firms between 2007-2016 and covering 230 firms’ years. Diagnostic test were conducted using Levin, Lin and Chu tests to validate stationarity of collected data before a panel regression analysis was conducted to determine the nature of relationship between the study variables.

Findings from the study among others that indicate that there exist a positive significant effect of Board Independence (BDIND) on audits fees (B = 4952.448, p > 0.0000) while both size (BDSIZE) and audit committee independence (AUDCON) add a negative effect on audit fees (B = -2333.021; -270871.910, p > 0.0000). On the basis of these findings, the study concludes that corporate governance practices have significant impacts on audits fees charged on Nigeria distributive firms.it is therefore recommended that Nigeria distributive firms should regulate the unethical use of its board independence for effectiveness and minimization of audits fees.