How does an external auditor's tenure affect audit quality, and does board independence moderate this relationship?

Audit quality remains a central concern for regulators, investors, and other stakeholders, particularly in emerging markets where governance structures continue to evolve. While auditor tenure has long generated debate due to the trade-off between auditor expertise and independence, empirical evidence on how internal governance mechanisms condition this relationship remains limited. In particular, little is known about whether board independence can mitigate potential risks associated with extended auditor–client relationships. This study addresses this gap by examining the effect of external auditor tenure on audit quality and assessing the moderating role of board independence among publicly listed firms in Nigeria. The study analyses panel data from 152 firms listed on the Nigerian Exchange Group over the period 2015–2024, yielding 1,520 firm-year observations. Audit quality is proxied by the logarithm of audit fees, while auditor tenure and board independence are measured using established governance indicators. Fixed and random effects panel regression models are estimated, with model selection guided by the Hausman test. Robust standard errors are employed to correct for heteroscedasticity and serial correlation, and firm size, leverage, and profitability are included as control variables. The findings reveal that auditor tenure has a positive and statistically significant effect on audit quality, suggesting that longer auditor engagement enhances audit effort through accumulated client-specific knowledge. Board independence also exerts a positive influence on audit quality and significantly strengthens the tenure–audit quality relationship, indicating that strong boards mitigate familiarity threats associated with long auditor tenure. The study is limited by its reliance on audit fees as a single proxy for audit quality and its focus on one emerging market. Practically, the results inform regulators, boards, and audit committees on the complementary roles of auditor experience and board oversight. Socially, the findings support stronger corporate governance as a pathway to more credible financial reporting. The study contributes original evidence on the conditional role of board independence in shaping auditor tenure outcomes in an emerging economy.