Knowledge Spillover Versus Economic Bonding Theories - The Inclinations of the Nigerian Auditing Firms

14 Pages Posted: 16 Mar 2012

See all articles by Emmanuel Ikechukwu Okoye

Emmanuel Ikechukwu Okoye

Nnamdi Azikiwe University - Department of Accountancy

Rosemary Obasi

Benson Idahosa University - Department of Accounting

Date Written: March 14, 2012

Abstract

This paper examines the inclination of the Nigerian auditing firms to the various theories on auditor independence i.e. the Knowledge Spill over (KSo) and Economic Bonding (EB) theories. Researches have been conducted in different countries by different researchers ascertaining which theory their auditors would support. Hence, the aim of this study is to determine the bent of mind of the Nigerian auditing firms. The survey questionnaire was employed to elicit information from the auditors. Four states across the poles of the nation formed the population of the study from which the sample was drawn. One hundred and one questionnaires were distributed and sixty-two were retrieved, representing sixty-one percent. The mean scores were used to analyze the data and the t-test and z-test statistics were employed to test the hypothesis using stata 9 software. The study finds that Nigerian auditing firms are in support of the KSo theory. This finding was only supported by the variable size while the other two variables (experience and regulating institution) did not support the theory. We therefore recommend strict regulatory follow ups to ensure adherence to the Nigeria’s corporate governance requirements.

Keywords: knowledge spillovers, economic bonding, independence theories, non-audit services

Suggested Citation

Okoye, Emmanuel Ikechukwu and Obasi, Rosemary Obiageri, Knowledge Spillover Versus Economic Bonding Theories - The Inclinations of the Nigerian Auditing Firms (March 14, 2012). Available at SSRN: https://ssrn.com/abstract=2022103 or http://dx.doi.org/10.2139/ssrn.2022103

Emmanuel Ikechukwu Okoye (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Rosemary Obiageri Obasi

Benson Idahosa University - Department of Accounting ( email )

Department of Accounting
ff Benin-Ugbor Road
Benin, 234
Nigeria

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