The Effect of Independent Regulation on Audit Quality: Evidence from UK And Nigeria

Akinduko, Alexander Olabode (2023) The Effect of Independent Regulation on Audit Quality: Evidence from UK And Nigeria. Doctoral thesis (PhD), Manchester Metropolitan University.

Preview

Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (10MB) | Preview

Abstract

This study assessed the effect of independent regulation on audit quality. The research data consisted of both primary and secondary. The primary data was obtained from structured interviews conducted with staff members of the Financial Reporting Council, UK, and the staff of the professional accounting bodies (PABs) in Nigeria. The analysis of data entailed the identification of themes and patterns, percentage analysis of the FRC audit inspection grades, and the textual analysis of the audit inspection reports and tribunal judgements using the NVivo 12 (Pro) qualitative data analysis software. The study found that the audit quality outlook in the UK improved during the review period. It was observed that the FRC conceptualised audit quality in terms of adherence of the Big4 audit firms to legislations, auditing and accounting standards, ethical standards, and their own internal operating policies and procedures, with compliance assessed using key audit indicators constituted into an Audit Quality Framework (AQF) in 2008. The study revealed a double-faced audit culture of the Big4 audit firms towards audit quality, wherein they recognise and commit to the pursuit of audit quality but adopted implementation strategies which ensured their interests were served at the expense of the public interest, thereby exhibiting the features of both the normative and abolitionist theoretical perspectives of the public interest theory. The study contributed to theory by providing evidence for the articulation of the public interest behaviour of audit firms in the UK and contributed to debates on the conceptualisation of audit quality. The use of qualitative research approach represented a departure from the common application of quantitative methods to practice based issues. It provided a guide for policy initiatives for the strengthening of audit regulation, especially in developing countries like Nigeria.