Audit Quality, Enterprise Risk Management, and Stock Returns of Multinational Manufacturing Companies listed in Nigeria
Meeting stock returns in multinational manufacturing companies listed in Nigeria has remained difficult as the companies had been struggling to remain profitable owing to high cost of running manufacturing companies in Nigeria. Unethical practices, security challenges and unstable economic policies have greatly hindered effective performance and stock return of these companies. Prior studies had shown that audit quality and enterprise risk management had the ability to enhance stock return. Consequently, this study examined the effect of audit quality and enterprise risk management on stock returns of multinational manufacturing companies listed in Nigeria. The study employed ex-post facto research design. The population comprised 32 multinational manufacturing companies listed on the Nigerian Exchange Group (NGX) as at 31st December 2021. Fourteen firms with relevant data were purposively selected. Validated data, covering a period of 15 years (2007 – 2021) were extracted from published annual reports and sustainability reports of the sampled firms. Reliability of the data was premised on the auditors’ and regulatory agencies certification of the source documents. Descriptive and inferential (multiple regression) statistics were used to analyzed the data at 5% significant level. Findings revealed that audit quality and enterprise risk management had significant effect on return on equity (Adj.R2 = 0.0925, Wald-test (5, 201) = 5.20, p > 0.05). The study recommended that management of the companies should ensure audit quality and enterprise risk management to enhance stock returns of the companies.
Keywords: Audit firm size, Audit independence, Audit quality, Compliance and reporting, Enterprise risk management, Risk monitoring, Stock returns
