Effect Of External Audit On Firms Performance In Nigeria:- Obilor, Paul C

ABSTRACT V This study examined the effect of external audit on firms performance in Nigeria from 2005 to 20118. Secondary sources of data were explored for the study. Data for the study constitute, return on assets (ROA); used as a dependent variable while audit fees (ADF), and inventory turnover ratio (ITO) were used as explanatory variables. Multiple regression analysis was used to testfor the explanatory variables on the return on assets (dependent variable) in Nigeria. The study revealed that there is a significant effect ofthe explanatory variables on return on assets. The resultsfrom regression analysisfurther shows that explanatory variables and accountedfor 98% variations in external reserves. This result suggested that ADF and ITO contributes immensely to the external reserves position in Nigeria. This study recommend that; the government should implement good policies which will increase the adoption of external audit services so as to encourage firms to keep proper records of their activities in the economy. Government should encourage more firms domestically to adopt external auditing practices especially the infant industries. SME’s, agricultural sector so as to boost the level of accountability and increase domestic outputsfor exportation which will equally generates more income to the country