Effect of Audit Attributes on Quality of Financial Risk Disclosure of Listed Non- Financial Companies in Nigeria

The study examined the effect of audit firm attributes on the quality of financial risk disclosure among listed non-financial companies in Nigeria. Specifically, the research examined the influence of audit firm independence, audit firm size, and audit firm industry specialization on financial risk disclosure quality (FRDQ). Using a panel dataset covering multiple firms across time, the study employed the Generalized Method of Moments (GMM) technique to address endogeneity concerns and ensure robust parameter estimates. The findings reveal that audit firm independence (AIND) exerts a positive and statistically significant effect on FRDQ, suggesting that the independence of external auditors enhances transparency and strengthens the disclosure of financial risks. Conversely, audit firm size (AFSIZE) exhibits a negative and significant influence on FRDQ, indicating that larger audit firms may not necessarily guarantee better disclosure quality, possibly due to complex engagements and competing client demands. Audit firm industry specialization (ACS), however, shows a positive and significant effect, implying that specialized knowledge in a particular industry enhances the auditors’ ability to improve the quality of financial risk disclosure. The results underscore the importance of regulatory bodies, such as the Financial Reporting Council of Nigeria and the Securities and Exchange Commission, in strengthening auditor independence and promoting industry specialization as mechanisms to enhance disclosure practices. The study contributes to the corporate governance and auditing literature by providing empirical evidence from Nigeria, while also highlighting implications for policy, practice, and future research.