International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)


Statutory Auditors Going Concern Judgement and Profitability Performance of Companies Listed on the Nigerian Exchange

Author(s): Tunji, T. Siyanbola Shamusideen, K. Kassim Folajimi F. Adegbie

Growth in business profitability performance remains fundamental to every business irrespective of their primary objective. Studies have shown that decline in return on assets adversely affects returns attributable to investors’ and other stakeholders. Past literature has considered the effect of corporate governance on profitability performance but there is dearth of studies that have looked at the effect of Statutory Auditors’ Going Concern Judgement (SAGCJ). This study examined the effect of statutory auditors’ going concern judgement on profitability performance of companies listed on the Nigerian Exchange. The study employed an ex-post facto research design. The population comprised of 155 companies listed on the NGX. A sample of 87 companies was purposively selected with the relevant data for a period of 16 years from 2006 to 2021. The reliability of the data was premised on the independent certification by the statutory auditors as well as relevant agencies certifications. Data was analysed using descriptive and inferential (multiple linear regression analysis) statistics based on 0.05 level of significance. Profitability performance of companies was represented by Return On Asset (ROA) as employed in empirical literature. The study revealed that statutory auditors going concern judgement significantly affected ROA (Adj.R2 = 0.0799, F (4, 911) = 14.35, p < 0.05), Audit Firm Size (AFSZ), Information Asymmetric (ASYM) moderated (Adj.R2 = 0.0776, F (6, 880) = 17.39, p < 0.05) of companies listed on the Nigerian Exchange. The study concluded that statutory auditors going concern judgement is a significant factor influencing return on asset of companies listed on the NGX. Hence, the study further recommends that future studies should consider examining the effect of statutory auditors going concern judgement on other business performance measures other than profitability performance, such as liquidity performance and financial leverage performance.

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