Determinants of External Auditor Choice Selection in Listed Global Brand Companies in Nigeria

Abstract

This research work analyses the determinants of external auditor choice selection in listed Global Brand companies in Nigeria. The Big 4 audit firms consisting Akintola Williams, Ernst and Young, KPMG, and Price Water House Coopers where selected for the study. Out of the 11 global brands in Nigeria, only 9 had complete and consistent data and so were used. The study employed Multinomial Probit Regression (PMR) analysis in x-raying the data. Panel data referring to listed companies for the period of 2008-2017 was employed. The independent variable used for this study include: firm size; leverage; firm profitability; firm age, and; audit fee. The result showed a significant positive relationship between firm size and choice of external auditor’s selection. The study also reveals audit fee could discourage listed global brand companies from engaging the Big 4 audit firms in Nigeria. The study therefore recommends that the global brand companies should ensure a large asset base which will improve their tendency to engage the Big 4. In addition the Big 4 audit firms should ensure that their fees are affordable as this will attract the global brand companies in Nigeria.