Eghosa Godwin Inneh

Economic theory posits that competition drives efficiency; the extent to which this is true in an oligopolistic audit market poses an empirical challenge. Furthermore, studies have postulated that both traditional and modern industrial organization theories are relevant for analyzing market competition. Therefore, this study investigated the effects of static and dynamic audit market competition on audit efficiency in the Nigerian banking industry. Secondary data were obtained from the audited annual financial statements of 12 banks from 2006 to 2020. The study adopted a 2-stage regression model; in the first stage, the audit efficiency scores were derived from an output-based, variable-return-to-scale version of data envelopment analysis (DEA) comprising audit report lag and audit fees as audit input variables and audit quality as the audit output variable. The efficiency scores were regressed on audit market competition and some control variables in the second stage via the bootstrapped truncated regression technique to analyze the effect of competition on efficiency in the audit market. The results showed a positive association between static competition and audit efficiency (50.57, p = 0.014). Because high concentration implied low competition, this finding implied that efficiency was impaired because of a lack of significant competition. The results also showed a positive and significant association between dynamic competition and efficiency, which implied that dynamic competition enhanced efficiency (0.21, p = 0.000) in the audit market. The study concluded that static competition impairs efficiency, while dynamic competition ensures efficiency in the Nigerian banking industry.

This study aims to analyze digital marketing adoption among micro and small enterprises (MSEs) operating in Lagos State, Nigeria. This state was chosen because it was the worst hit by the COVID-19 pandemic regarding the reported number of infections and it has a large concentration of MSEs. There is no doubt that the COVID-19 pandemic brought changes to how businesses operate. It succeeded in pushing business owners into adopting new business strategies, all in the bid to adapt to the reality of the pandemic and the associated changes. The cross-sectional survey design was adopted; data were collected through an online survey of 240 MSEs operating in Lagos State. The results show no substantial increase in digital marketing adoption during the pandemic relative to the pre-pandemic era. The findings, however, reveal that digital marketing use differed significantly according to sector and size before and during the pandemic. No changes were found in digital marketing adoption in the information technology and finance sectors, while a decline in digital marketing adoption was reported in the hospitality sector. On the other hand, there was a rise in the use of digital marketing during the pandemic in the agriculture and manufacturing sectors. These findings provide an empirical managerial perspective establishing the link between reality and theoretical business underpinnings.

A dominant strand of literature advances a positive association between corporate governance quality and investor confidence. However, the corporate life cycle may influence the relationship. Therefore, this study investigated the moderating role of the corporate life cycle in the association between corporate governance quality and investor confidence in the Nigerian banking industry. Corporate governance quality was proxied using a composite measure of board characteristics comprising board size, board meeting, independence, and board gender diversity, while investor confidence was proxied using the price-earnings ratio. Secondary data were obtained from the audited annual financial statements of 12 banks from 2006 to 2021. The study adopted a pooled regression model based on the results of Hausman, and the Breusch and Pagan Lagrangian multiplier test. The results showed that corporate governance quality positively and significantly impacted investor confidence at the introduction (coef = .318, p = 0.017) and decline (coef = 383, p = 0.011) phases of the life cycle. Banks at the introduction and decline phases of the life cycle were characterized by a narrow resource base, low profitability, and higher risky investments sufficient to attract investor confidence. The study concludes that corporate governance quality enhanced investor confidence at the introduction and decline phases of the banks’ life cycle.

The optimal contract theory posits that an effective compensation plan should be based on performance. Globally, legislators are concerned about the gender pay gap due to stereotypes against women in line with congruity theory. Despite the plethora of gender-related studies, empirical evidence on the gender pay gap at the upper-echelon management level is limited, especially in Africa. Hence, the study examines the effect of CEO gender on CEO compensation in the Nigerian deposit money banks using a longitudinal research design. The study employed the ordinary least square (OLS), fixed effect method, and random effect method to analyze the 144 firm-year observations collected from the Nigerian Exchange Group (NGX) factbooks and the financial reports of 12 banks during 2011–2022. The Hausman Test (chi sq = 3.623, P = 0.003) and Redundant Fixed Effect Test (chi sq = 8.159, P = 0.000) indicated that the appropriate method of reporting is the fixed effect method. The association between CEO gender and CEO compensation (coeff = –8.690 and t = –10.31) is statistically negatively related. The study concluded a gender pay gap in favor of men among Nigerian Nigerian deposit money banks’ CEOs. These findings align with the congruity theory. The study recommends a mandatory gender pay parity plan in line with the optimal contract theory to reduce gender pay inequality.

Type of the article: Research Article

Abstract
To defend its stewardship role to business owners, management often employs audit firm industry specialists to validate the reporting system’s authenticity. While auditing, these specialist auditors may expend additional effort to achieve audit quality. However, the direction of the association between audit firm industry specialization, audit effort, and audit quality is unknown. Therefore, this research analyzes the nexus between audit industry specialization, audit effort, and audit quality in Nigerian banks between 2011 and 2023. Audit firm industry specialization is proxied using a binary variable, where 1 represents an audit firm with a market share above 30 percent and 0 otherwise. Audit effort is proxied by audit report lag, defined as the cumulative number of days from the fiscal year-end to the day the auditor signs off the financial statements. Finally, audit quality is proxied by using a discretionary accrual model. The study utilized the panel vector autoregression model to examine the annual data of 11 banks. The findings in the three models indicate that in the first model, prior audit effort influences the current audit effort (coef = 0.226, p <0.05), while in the second model, both previous experience of specialization (coef = 0.872, p < 0.05) and audit effort (coef = 0.362, p < 0.05) influence the current audit firm industry specialization. Finally, in the third model, audit firm industry specialization drives high audit quality (coef = 0.069, p <0.05). The study concludes that corporate management appointment of specialist audit firms can result in extended audit report lag but with a positive effect on audit quality.