Auditors’ dysfunctional behaviour and audit quality in Nigeria

Auditors provide a third-party service by giving their judgement on a company's financial statements, which serve as the foundation for choices made by investors and other stakeholders. As a result of multiple audit failures not only in Nigeria, but also in Western countries, poor audit quality has led to a loss of confidence in the financial accounts attested to by auditors. The aim of this study was to investigate the impact of auditors' dysfunctional behaviours in Nigeria. The specific objectives of this study were to (i) investigate the effect of fear of loss of client on audit quality in Nigeria and (ii) investigate the effect of staff audit evaluation on audit quality in Nigeria. There were 3,323 audit firms in Nigeria, which represented the population of the research. The study used a survey research methodology and a random sampling procedure with the Taro Yamane sample size technique, resulting in 357 audit businesses throughout Nigeria's six geopolitical zones. The data was investigated using partial least squares structural equation modelling (PLS-SEM). According to the findings of the study, staff audit evaluation has a considerable positive effect on audit quality, whereas auditors' fear of losing clients, while positive, has an insignificant direct relationship with audit quality in Nigeria. However, the study concluded that auditors’ dysfunctional behaviour has a significant impediment to obtaining optimal audit quality. The study therefore recommended that audit partners and supervisors should always recognise the audit team's efforts, whether or not a misstatement is discovered. Furthermore, audit partners should always encourage their staff to adequately exercise necessary professional skill in their audit work.