Determinants of Key Audit Matters Disclosure in Listed Financial Services Firms in Nigeria
The global accounting scandals that resulted in financial crises and corporate bankruptcies as a result of an unmodified opinion received by companies has resulted in the loss of confidence in independent auditing. Stakeholders of organizations seek to make informed decisions from the disclosed key audit matters from the audit report received from their auditors and to allow for a greater level of transparency by increasing the information content, to promote the credibility and reliability of audit reports. Hence, the study investigated the effect of firms’ characteristics on key audit matters disclosure in financial services firms in Nigeria. The longitudinal research design and census sampling method were adopted. The study sampled 49 companies which is also population of financial services firms listed on the Nigeria Exchange Group as of 31st December 2022. Data were collected from annual reports of the financial services firms from 2017 to 2022. Data were analysed using Poisson regression analysis and descriptive statistics. The findings revealed that firm size, audit fee, and auditors’ independence have a positive and significant effect on key audit matters disclosure in financial services firms listed in Nigeria. The study recommended that small firms should ensure the disclosure of key audit matters, audit fees should be prioritized as it aids the disclosure of KAM, and adequate standards to ensure auditors’ independence should also be enforced. Keywords: Disclosure of key audit matters, firm size, audit fee, auditors’ independence, financial services firms JEL Codes: M40, M42, M48