Audit Partner Rotation and Audit Quality in Nigerian Listed Firms: Does Governance Context Matter?

This study examines the effect of audit partner rotation on audit quality in Nigerian listed firms and investigates whether corporate governance context moderates this relationship. Audit partner rotation is mandated under the Financial Reporting Council of Nigeria's auditing standards as a mechanism to prevent auditor familiarity threats and preserve audit independence. The empirical relationship between rotation and audit quality, however, remains contested in the literature, with evidence varying across regulatory environments. Drawing on auditor independence theory, this study investigates whether mandated rotation cycles are associated with improved audit quality proxied by absolute discretionary accruals, audit opinion accuracy, and going concern reporting rates in a sample of thirty listed firms over nine years. Corporate governance context is introduced as a moderating variable, measured by board independence, audit committee effectiveness, and institutional ownership levels. Panel regression with interaction terms tests whether governance quality amplifies the quality-enhancing effect of audit partner rotation. The study fills a gap in the Nigerian auditing governance literature by focusing on the governance-audit interaction rather than treating audit quality as an independent governance phenomenon. Findings are anticipated to show that rotation improves audit quality most significantly in firms with strong governance contexts. Results will assist the Financial Reporting Council of Nigeria and listed company audit committees in calibrating rotation and governance policies. Keywords: audit partner rotation, audit quality, corporate governance, audit independence, listed firms.