Impact of Audit Firm Size on Audit Quality and Assurance

Student: Ezekiel Segun Ajayi (Project, 2025)
Department of Accounting
Ekiti State University, Ado-Ekiti, Ekiti State

Abstract

This study investigates the relationship between audit firm size and audit quality, as well as its impact on assurance. Using employees of selected deposits money banks in Ikeja, Lagos State, Nigeria. This research employs a quantitative approach to examine the effect of audit firm size on audit quality proxies, including audit fees, audit report lag, and discretionary accruals. The results suggest that larger audit firms are associated with higher audit quality and assurance, as evidenced by lower discretionary accruals and shorter audit report lags. However, the findings also indicate that the relationship between audit firm size and audit quality is non-linear, with diminishing returns to scale beyond a certain firm size threshold. The study contributes to the existing literature by providing insights into the complex relationship between audit firm size, audit quality, and assurance, with implications for audit regulators, practitioners, and users of financial statements.

Keywords
audit quality assurance relationship impact discretionary accruals investigates employees selected
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