Effect of Audit Firm Rotation and Audit Quality in the Nigerian Public Sector Evidence from Selected Audit Firms in Ibada

Abstract

This study examined the effect of audit firm rotation on audit quality in the Nigerian public sector using selected audit firms in Ibadan, Oyo State, Nigeria. The study investigated the effect of audit firm rotation on audit quality, auditor independence, and the challenges associated with implementing audit firm rotation in the public sector. A descriptive survey research design was adopted. The population comprised audit partners, audit seniors, internal auditors, and government audit officers in Ibadan. Using stratified random sampling technique, a sample size of 40 respondents was selected, while 36 valid questionnaires were analyzed. Data were collected through structured questionnaires and analyzed using descriptive statistics and regression analysis with the aid of SPSS. The findings revealed that audit firm rotation has a significant positive effect on audit quality and auditor independence in the Nigerian public sector. The study also identified challenges such as high transition costs, loss of client-specific knowledge, and weak regulatory enforcement. The study concluded that audit firm rotation enhances audit quality and strengthens public confidence in financial reporting. It recommended stronger enforcement of audit rotation policies and continuous professional training for auditors.