Title:
IMPACT OF AUDIT QUALITY AND TRANSFER PRICING AGGRESSIVENESS ON FIRM RISK OF LISTED MULTINATIONAL COMPANIES IN NIGERIA

Authors:
Oke Akudo Clara, Olaoye Oluwayemisi, Sunday Ayodele Olakojo, Adeboboye Gbenga Ola, AdekeyeOlosunde Toyin and Kayode Priscilla Oluwakemi, Nigeria

Abstract:
This study examined the impact of audit quality and transfer pricing aggressiveness on the firm risk of listed multinational companies in Nigeria. Utilizing data from multinational companies listed on the Nigerian Exchange Group between 2012 and 2023, the research assesses how factors such as audit type, audit fees, audit tenure, related party transactions, effective tax rate, and deferred tax provision influence firm risk. The data were analysed using descriptive statistics such mean, standard deviation, skewness, kurtosis, jaqubera statistics, and panel regression models. The findings of the study that audit type (ATY) and auditor tenure (AT) have positive and significant impact on firm risk. However, audit fees (AF) has no statistically and significant influence on firm risk. The finding showed that RPTS has a positive and significant contribution to the firm risk. While, DTR, on the other hand, exhibits a negative and no significant relationship between deferred tax rate and firm risk. The finding revealed that ETR demonstrates a positive, indicating that an increase in effective tax rate is associated with higher firm risk. The study concluded that High-quality audits are essential in identifying and mitigating potential risks, enhancing the reliability of financial statements, and fostering investor confidence. Also, choose reputable and well-established audit firms, is preferable those with a strong international presence and recognition need to handle audit work of multinational companies. The study recommends that Investor should critically evaluate the audit quality of multinational companies before making investment decisions and Pay attention to the type and reputation of the audit firms engaged by multinational companies.