NARROWING THE EXPECTATION GAP IN NIGERIAN QUOTED FIRMS VIA EMPLOYEES’ SHAREHOLDING

This study examined the influence of employees’ shareholding on the Expectation Gap (EG) in auditing, focusing on Nigerian quoted firms. A cross-sectional survey research design was adopted for the study, along with the purposive sampling method. Three hundred and ten (310) responses were used for the analysis. The data were analysed using the Partial Least Square Structural Equation Model (PLS-SEM) at a 5 percent level of significance. The result showed that employees’ shareholding (β = 0.374; t = 7.362) has a significant positive effect on the external auditor’s independence factor. The study concluded that employees’ participation is a good practice to be employed by the Nigerian quoted firms in addressing the challenge of EG in those firms. Therefore, the study recommended that quoted firms should strengthen the independence of external auditors by allowing employees’ participation in the ownership structure to reduce the EG.