Effect of auditor’s client communication enhancement on the financial reporting quality of listed industrial goods companies in Nigeria

Abstract

The study examined the effect of auditor–client communication enhancement on financial reporting quality in listed industrial goods companies in Nigeria. The study adopted an ex-post facto research design, using secondary data collected from ten listed industrial goods companies over a ten-year period from 2015 to 2024. Panel regression analysis was employed to examine the relationships among the variables. The findings indicate that timeliness of auditor–client communication and formal communication channels have positive and statistically significant effects on financial reporting quality, highlighting the importance of timely and structured communication in enhancing stakeholders’ confidence and perceptions of reporting reliability. In contrast, communication openness and transparency and auditor accessibility and availability were found to be positive but statistically insignificant, suggesting that openness and accessibility alone do not meaningfully improve financial reporting quality without formalized and timely communication mechanisms. The study concludes that enhancing audit communication, particularly through timeliness and formal channels, is critical for improving financial reporting quality and narrowing the audit expectation gap. It is recommended that auditors prioritize timely interactions and establish structured communication mechanisms with clients, while regulators and firms provide training and guidelines to reinforce effective communication practices. These measures can strengthen transparency, accountability, and the overall credibility of financial reporting in Nigeria’s industrial goods sector