Audit expectation gap factors and stakeholders’ confidence in Nigerian quoted firms
Abstract
The Audit Expectation Gap (AEG) has emerged as a demanding concern in the auditing profession, with far-reaching implications for corporate governance, financial reporting, and stakeholder trust; hence, this study investigated the effect of the AEG factors on the stakeholders’ confidence in Nigerian quoted firms. The study employed a cross-sectional survey research design, while a total of one hundred and three (103) valid responses were used for the analysis. The data was analysed via the regression analysis with the aid of the Statistical Packages for the Social Sciences (SPSS) at a 5 per cent level of significance. The findings revealed that only the reliability factor has a significant positive effect on stakeholders’ confidence, while the other factors exhibited an insignificant positive effect on stakeholders’ confidence. The study concluded that the reliability of financial statements plays a crucial role in influencing stakeholders’ confidence in Nigerian quoted firms. Therefore, it was recommended that the Nigerian quoted firms should prioritise accurate, dependable, and timely financial reporting.
Keywords
Full Text:
PDFReferences
References
Adeniji, A. A. (2012). Auditing and Assurance Services (2nd ed.), Lagos: Value Analysis Consult.
Adeosun, O. A., & Ayedogbon, M. (2025). The effects of international financial reporting standards on the quality of financial statements in Nigerian listed Companies. Journal of Economics, Finances and Management Studies, 8(2), 787-800.
Adeyemo, F. H., Igbekoyi, O. E., Azeez, O. A., & Ademoye, K. (2025). Stakeholders’ expectation and audit compliance: Evidence from selected audit firms in Nigeria. Journal of Liaoning Technical University (Natural Science Edition), 19(4), 81-106.
Agbeyangi, B. A. (2023). Audit expectation gap and financial reporting credibility: An empirical analysis. West African Accounting Journal, 11(1), 54–70.
Akther, T., & Xu, F. (2020). Existence of the audit expectation gap and its impact on stakeholders’ confidence: The moderating role of the Financial Reporting Council. International Journal of Financial Studies, 8(4), 1-25.
Alao, A. A. (2024). Audit expectation gap: An empirical analysis from Nigeria. International Journal of Commerce and Finance, 10(2), 131-153.
Alao, A. A., Akingunola, R. O. & Akintoye, I. R. (2022). Audit expectation gap: A review of literature. Conference Proceedings at the 7th Annual International Academic Conference on Accounting and Finance held at Rivers State University Nkpolu-Oroworukwo, Port Harcourt, Nigeria, Auditorium from 12th – 13th April, 2022.
Alao, A. A., Akingunola, R. O. &Akintoye, I. R. (2023). Corporate governance, audit quality and audit expectation gap: Theoretical and conceptual perspectives. International Journal of Commerce and Finance, 9(2), 92-107.
Ashibogwu, N. K., Omonigho-Okoro, R. & Ikenga, G. U. (2023). An empirical analysis of the audit expectation gap in Nigeria. Journal of Management Small and Medium Enterprises, 16(3), 431-440.
Companies and Allied Matters Act (CAMA) (2020). Companies and Allied Matters Act 2020. Laws of the Federation of Nigeria. Retrieved from https://cac.gov.ng
Enofe, A. O., Mgbame, C. O., Aronmwan, E. J., & Ogbeide, I. E. (2025). Audit reasonableness expectation gap: Users’ perception in Nigeria. International Journal of Business and Social Research, 3(3), 154-163.
Fotoh, L. E., Lorentzon, J. I., &Fossung, M. F. (2021). An empirical investigation of the audit expectation gap: Evidence from Cameroon. Journal of Accounting and Taxation, 13(3), 191-204.
Freeman, R. (1984). Strategic management: A stakeholder approach, Boston: Pitman.
Gacheru, M. M., Nasieku, T. & Oluoch, O. (2019). Effect of audit committee characteristics on the audit expectation gap: Evidence from state corporations in Kenya. European Journal of Accounting, Auditing and Finance Research, 7(1), 48-65.
Hammond, P., Opoku, M. O., & Kwakwa, P. A. (2022). Relationship among corporate reporting, corporate governance, going concern and investor confidence: Evidence from listed banks in sub-Saharan Africa. Cogent Business & Management, 9(1), DOI: 10.1080/23311975.2022.2152157
Horisch, J., Schaltegger, S., & Freeman, R. E. (2020). Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275(1), DOI:10.1016/j.jclepro.2020.124097
IASB (2024). International Accounting Standards Board (IASB) (2018). Conceptual framework for financial reporting. IFRS Foundation. Retrieved from www.ifac.org
Ikpe, A., & Uwah, M. (2023). Audit quality and stakeholder confidence in listed Nigerian firms. Nigerian Journal of Accounting and Finance, 15(2), 112-126.
International Accounting Standards Board (IASB) (2024). Conceptual framework for financial reporting. IFRS Foundation.
Jannat, T. (2022). Investigation of expectation gap between auditors and investors in Bangladesh. International Journal of Current Science Research and Review, 5(3), 640-646.
Lateef, S. A., Rashid, N., Olowookere, J. K., & Ado, A. B. (2021). An empirical evidence of the value relevance and timeliness of financial reports in the post-adoption of IFRS in Nigeria. The Journal of Management Theory and Practice (JMTP), 2(1),16-25.
Lazarus, E. F., Johan, I. L., & Michael, F. F. (2021). An empirical investigation of the audit expectation gap: Evidence from Cameroon. Journal of Accounting and Taxation, 13(3), 191-204.
Nguyen, H. T. & Nguyen, A. H. (2020). Audit expectation gap: Empirical evidence from Vietnam. Journal of Asian Finance, Economics and Business, 7(5), 51-60.
Nwaogwugwu, C. C. (2020). Effects of IFRS adoption on the financial performance and value of listed banks in Nigeria. Journal of Finance and Accounting, 8(4), 172-181.
Ocheni, S. I. & Adah, A. (2018). Perception on audit expectation gap on the statutory duty of Nigerian auditor. European Journal of Accounting, Auditing and Finance Research, 6 (8), 42-53.
Odum, A. N., & Kelechi, C. C. (2023). Effect of Auditor’s independence on audit quality: evidence from Deposit Money Banks in Nigeria. Journal of Global Accounting, 9(4), 147-163.
Okafor, A., Adeleye, B. N., & Adusei, M. (2021). Corporate social responsibility and financial performance: Evidence from US tech firms. Journal of Cleaner Production, 292, doi: 10.1016/j.jclepro.2021.126078.
Okegbe, T. O., Ojimadu, J. O., Orajekwe, J. C., & Egbunike, F. C. (2019). Auditor independence and audit quality: Empirical evidence from Quoted Oil and Gas Firms in Nigeria. Journal of Global Accounting, 6(1), 75-87.
Okonewa, O., & Okafor, G. O. (2023). Audit quality and accounting going concern of listed manufacturing companies in Nigeria: Altman Z-score approach. Journal of Global Accounting, 9(4), 183-205.
Olojede, P., Erin, O., Asiriuwa, O., & Usman, M. (2020). Audit expectation gap: An empirical analysis. Future Business Journal, 6, 1-12.
Omotilewa, O. J., Adeyemi, S. B., & Oladipo, T. O. (2024). Bridging stakeholders’ expectations gap: The role of sustainability Reporting of Listed Firms in Nigeria. European Journal of Business and Innovation Research, 12(2),17-40.
Onulaka, P., & Sammy, M. (2017). Influence of self-regulatory policy of auditing profession on audit expectation gap: qualitative methodological approach. Mediterranean Journal of Social Science, 8(1), 96-104.
Rostami, V. (2019). Audit expectation gap in Islamic countries. Iranian Journal of Accounting, Auditing and Finance, DOI: 10.22067/ijaaf.2019.39252, 55-72.
Sani, A. I., & Ikpor, I. M. (2023). Audit expectation gap, auditors’ statutory duty and financial reporting quality in Nigeria. Journal of Accounting, Auditing and Business, 6(1), 16-31.
Zakari, M. (2017). International Financial Reporting Standard (IFRS) adoption and its impact on financial reporting: Evidence from listed Nigerian oil and gas companies. Asian Journal of Finance & Accounting, 9(1), 464-474.
DOI: https://doi.org/10.24198/jaab.v9i1.66346
Refbacks
- There are currently no refbacks.
Copyright (c) 2026 Journal of Accounting Auditing and Business
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal of Accounting Auditing and Business (JAAB) Indexed in:
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.