MODERATING EFFECT OF MANAGERIAL OWNERSHIP ON THE RELATIONSHIP BETWEEN AUDIT QUALITY AND FINANCIAL PERFORMANCE OF LISTED HEALTHCARE COMPANIES IN NIGERIA

Abstract

The study examines moderating effect of managerial ownership on the relationship between audit quality and financial performance of the health care enterprises listed on the Nigerian Exchange Group (NGX). All the eleven (11) health care firms listed on the NGX as at December 31, 2023, make up the study's population with a sampled six (6) firms. Ex-post facto research design was used. Data were obtained from the annual financial reports of health care firms listed on the NGX for the 11-year period (2013–2023). Descriptive and correlational statistics were also employed. STATA Version 15.0 software was used to analyze the data using multiple regression techniques. The audit fees and audit firm rotation of the sampled Nigerian health care firms listed on the NGX were found to have positive and significant effect on financial performance. Additionally, the findings showed a positive and significant moderating impact of managerial ownership on the relationship between audit fees and financial performance of the health care enterprises selected during the study period. Additionally, the findings indicated that managerial ownership does not strengthen the relationship between audit firm rotation and return on asset of the sampled firms. Based on the study's findings, the study recommend that management of health care companies should give emphasis to audit fees and audit rotation as both have positive effect on their financial performance. Additionally, the board of directors should give a special consideration to managerial ownership as it has statistical influence on the relationship between audit fees and financial performance.