Audit Characteristic and Accounting Conservatism among Listed Oil and Gas Firms in Nigeria

Abstract

This study investigates the effects of auditor characteristics on accounting on conservatism on listed oil and gas companies in Nigeria for the period of ten years, from 2011-2020. An ex-post facto research design was adopted for this study. The population of the study is made up of 9oil and gas firm listed on the floor of the Nigerian Stock Exchange (NSE) from year 2011 to 2020. The data used in this study were secondary data derived from annual reports and account of listed oil and gas firms in Nigeria. The study used panel regression and with respect to the result of Housman specification test fixed effect model was used. The result revealed that audit quality and auditor service have a positive and significant effect on accounting conservatism of listed oil and gas firms in Nigerian. Based on this finding it can be inferred that audit quality and audit service are important factors that influences accounting conservatism of oil and gas firms in Nigeria. Furthermore, the study reveals that auditor committee service has a negative but insignificant effect on accounting conservatism. However, audit tenure has a positive but insignificant effect on the level of accounting conservatism. Based on this finding the study recommends that Auditor with specialist knowledge should be as they understand the reporting process of such sector.  Therefore, oil and gas companies should employ the services of the Big-four audit firms.