Auditors’ Switch decision and financial performance of publicly listed non-finance Companies in Nigeria

This study investigated the relationship between auditors’ switch decision and financial performance of publicly listed non-finance companies in Nigeria. Ex-post facto research design was used and panel data involving measures of auditors’ switch decision (audit fees, audit opinion, big-4 audit firms and audit tenure) and financial performance (net profit after tax margin, earnings before interest and tax margin, earnings before interest, tax amortization and depreciation margin) were obtained from the audited financial statements from 2013-2023. Given the lack of studies that had not covered specific areas of Nigerian economy, companies in the natural resource, ICT, healthcare, agriculture and construction/real estate sectors were used. Data obtained were analyzed using descriptive, post-estimation and inferential statistical techniques. Specifically, the three stage least squares regression results revealed that auditors’ switch decision significantly and negatively influence the level of financial performance of non-finance companies in Nigeria. The study recommends among others that the board should reconsider reviewing fees of auditors as well as encouraging audit tenure; this would lead to increased financial performance. In addition, there is the need for listed non-finance companies to engage more of the Big-4 audit firms in order to enhance financial performance.