Effect of Audit Attributes and Book Value Per Share on Audit Opinion of Listed Negative Book Equity Firms in Nigeria
Abstract
Purpose: This study examines the impact of audit attributes and book value per share on audit opinion among listed negative book equity firms in Nigeria over a sixteen-year period (2007–2022). It evaluates audit opinion from a multidimensional perspective comprising unqualified audit opinion, non-going-concern–related qualification, and going-concern–related modification.
Design/Methodology/Approach: A correlational research design was employed using a population of 33 listed firms. A filtration approach yielded a sample of 19 firms with complete data. Secondary data were extracted from the annual reports and accounts of the sampled firms. Panel Multinomial Logistic Regression was used as the technique of analysis.
Findings: The study finds that audit switch has an insignificant effect on the likelihood of receiving both non-going-concern and going-concern–related modifications relative to unqualified audit opinion. Audit committee expertise significantly increases the likelihood of firms receiving both types of modified opinions. The results also show mixed evidence regarding the effects of audit size and book value per share on audit opinion outcomes.
Implications/Originality/Value: The study underscores the critical role of audit committee financial expertise in shaping audit opinion outcomes, particularly for firms that report negative book values. It adds to the literature by providing multidimensional evidence on audit opinion determinants within distressed firm contexts in an emerging market setting. Based on the findings, it recommends that management of listed Nigerian firms prioritize strengthening the financial expertise of their audit committees.
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