MODERATING EFFECT OF REGULATORY REQUIREMENTS ON AUDIT ATTRIBUTES OF FINANCIAL REPORTING QUALITY

This study examined the moderating effect of regulatory requirements on audit attributes of financial reporting quality. This study adopted an Expost-facto longitudinal design with population of forty-seven (47) insurance firms listed in the Nigerian exchange Group (NXG), the sample size for the study is 42. The sample size was mathematically derived using the Taro Yamen’s formula. The study relies on secondary source data for the study. The data was sourced from the published financial statements of the selected listed insurance firms. The data collected was span for ten (10) years’ period from 2013 to 2022. The study revealed that audit firm size has a weak positive correlation with financial reporting quality, also the study revealed that audit fee has a weak positive correlation with financial reporting quality. On the other hand, Regulatory Quality (RGQ) has a weak positive correlation with financial reporting quality. The study concluded the amount of audit fees does not have a significant impact on financial reporting quality though the impact is positive, suggesting that higher fees do not necessarily lead to better audit outcomes. Also, regulatory quality positively and significantly impacts financial reporting quality. This underscores the importance of a strong regulatory framework in ensuring high standards of financial disclosures. It is recommended that Insurance companies should not rely solely on audit fees as a measure of audit quality but should also consider the firm’s reputation, expertise, and regulatory compliance. Audit committees should establish clear criteria for auditor selection that go beyond fee considerations. Also, regulators should develop guidelines that enhance auditor independence, particularly in situations where regulatory quality is strong, to maximize the benefits. This could be done through regulatory updates and periodic audits of independence practices by industry regulators.