Özet:

This paper examines the relationship between audit fees and financial reporting quality of listed firms in Nigeria. We use 88 listed companies in Nigeria for the period of 2012 to 2016. The data were obtained from the annual reports of the listed firms and Thompson Reuters DataStream. Accruals model was used to represent financial reporting quality. A multiple regression was employed in the estimation model. The study reveals that higher audit fees are associated to lower level of discretionary accruals and thus imply higher financial reporting quality. The result also supports the resource dependence theory which proposes that higher percentage of financial experts in the board lessen the degree of accounting manipulation. The study provides an understanding to investors, policymakers and regulators about the pivotal role of audit fees in reducing accounting manipulation and in enhancing financial reporting quality in the listed firms in Nigeria. Keywords: Audit Fees, Discretionary Accruals, Financial Reporting Quality.

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