AUDIT EFFECTIVENESS AND FINANCIAL REPORTING TIMELINESS OF QUOTED FINANCIAL INSTITUTIONS IN NIGERIA

Abstract

Timely financial reporting is a critical attribute of high-quality financial information, as it enhances transparency, reduces information asymmetry, and supports informed decision-making. Against this background, this study evaluates the effect of audit effectiveness on the financial reporting timeliness of quoted financial institutions in Nigeria from 2015 to 2024. Audit effectiveness was proxied by audit rotation, audit fee and audit committee diligence, while financial reporting timeliness was measured by audit report lag. Firm size was introduced as a control variable. A sample size of 40 using the Krejcie and Morgan (1970) sampling method was studied. This study adopted an ex-post facto research design and estimated the model with the aid of a fixed effect model. The results showed that audit fee and audit committee diligence have a significant negative effect on audit report lag, audit rotation has an insignificant positive effect, while firm size, the control variable has an insignificant negative effect on audit report lag. on audit report lag of the examined firms. The theoretical foundation of this study is the Stewardship theory developed by Donaldson and Davis (1991) integrated with the economic bonding theory and signaling theory.. This study recommends that firms should carefully balance the benefits of audit firm rotation with its potential to delay financial reporting; firms should ensure that audit fees are in line with audit complexity and hold regular meetings to improve financial reporting timeliness.