Moderating Effect of Audit Committee Independence on the Relationship between Audit Firm Attributes and Audit Quality of Listed Non-Service Companies in Nigeria

This study examined the moderating effect of Audit Committee Independence (ACI) on the relationship between key audit firm attributes Auditor Independence (AFI), Audit Fees (AFE), and Audit Partner Rotation (APR) and Audit Quality (ACQ) among listed non-service companies in Nigeria. Drawing upon Agency, Stakeholder, and Resource Dependence Theories, the research adopts a correlational design using panel data from 53 companies covering the period 2012–2022. Audit quality is proxied by accrual quality, while ACI is modelled as a moderating variable to test its capacity to strengthen audit governance relationships. Data were analysed using Feasible Generalised Least Squares (FGLS) and Panel-Corrected Standard Errors (PCSE) to control for heteroskedasticity and contemporaneous correlation. Empirical findings reveal that auditor independence significantly and negatively influences accruals, implying improved audit quality, whereas audit fees exert a positive and significant effect, indicating potential impairment of auditor objectivity due to economic dependence. Audit partner rotation shows a weak and statistically insignificant relationship with audit quality. The inclusion of ACI as a moderator amplifies the positive effect of auditor independence but does not materially alter the effects of audit fees and partner rotation. The study concludes that audit quality in Nigeria’s non-service companies is primarily driven by auditor independence and strengthened further through robust and independent audit committees. It recommends that regulators, such as the Financial Reporting Council of Nigeria and the Securities and Exchange Commission, reinforce compliance with the Nigerian Code of Corporate Governance (2018) to enhance committee independence, transparency in audit fee disclosure, and balanced partner rotation cycles. The study contributes to the global discourse on audit governance and aligns with Sustainable Development Goals (SDGs) 8, 9, 12, and 16, which advocate for decent work, industrial innovation, responsible reporting, and strong institutions.