A lecturer of the Accounting and Finance Programme, Fedral University Otuoke, Dr. Etumudon Ndidi Asien says wholly-owned Nigeria audit practices need modern audit technologies to be engaged by Nigerian companies to audit their financial statement.
Dr. Asien made this assertion while presenting two papers titled “Analysis of Audit Market Share/Concentration in Nigeria” and “Can Availability of Internally Generated Funds Correlate with Investment in Tangible Fixed Assets?” at the 5th African Conference in the University of Mauritius.
The University Lecturer posited that local Nigerian auditors need to work hard to gain an increasing share of audit market in Nigeria.
Dr. Asien in his presentation examined different audit regimes in Nigeria that were accepted as the Big 4; the medium six foreign audit practice in Nigeria, the Nigerian wholly owned audit practice, the joint audit and non big 4.
According to Dr. Asien, the Big 4 auditors dominate the Nigerian audit market as they have the highest concentration and market share ratios. “We find that single auditors are paid significantly lower joint audits in Nigeria, Cross-sectional regressions results suggest that auditors remuneration significantly relate to clients age and size, particularly for Big 4 auditors who are considered to have technology advantage”, he said.
Also speaking on the second paper, Dr. Asien anchored his position on pecking order theory which asserts that firms need to finance themselves first with internally available funds before resorting to outside sources.
The Lecturer who used Nigerian data in his paper, investigated the association between internally generated funds and gross investments in tangible fixed assets.
According to him, the paper has practical implication for small scale entrepreneurs in Africa who find it relatively difficult to raise external finance for their businesses and therefore need to make do with internally available funds.