Effect of Tenure of Audit on Earnings Management of Quoted Nigerian Firms

This paper examined the effect of audit tenure on earnings management of quoted non-financial companies in Nigeria. In pursuant to the objective of the study, research question and hypothesis were formulated and tested at5% level of significance. Secondary data were obtained from twenty-four (24) firms quoted on the floors of the Nigerian stock exchange for the period, 2007–2017 (11years). The study adopted ex-post facto research design. In the analysis of data, the study employed Hausman specification test to test between the fixed and random effects since data for the study involved panel data. The white test (homoskedasticity test) was also conducted to check for constant variation of the disturbance term or whether the variance of the error term is not constant (a situation of heteroscedasticity). The findings from the study indicated that audit tenure, has a significant positive effect on earnings management of the Nigerian quoted companies.Based on the finding, the researchers therefore recommend that since our result is positive and significant, then the policy on three year tenure of audit engagement should be enforced and maintained in Nigeria.