Articles Published 31 July 2026

Does Board Financial Expertise Influence the Relationship Between Financial Attributes and External Auditor Choice?

Adamu Adamu Idris
Department of Accounting, Federal University Dutsin-Ma Katsina, Nigeria
Ibitoye Oyewale Olumide
Department of Accounting, Federal University Dutsin-Ma Katsina, Nigeria
Hussaini Bala
Department of Accounting, Banking and Finance, Tishk International University, Erbil, Iraq
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DOI 10.32890/jbma2026.16.2.4 Cite this article
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Abstract

This study examined the moderating effects of board member accounting expertise on the relationship between financial attributes and external auditor choice among 17 listed service firms in Nigeria from 2014 to 2023. Using a longitudinal research design and correlational approach, the study investigated the influence of profitability, liquidity, and leverage on the choice of Big 4 versus non-Big 4 auditors. Board expertise, measured as the percentage of independent directors with financial expertise, was hypothesized to moderate these relationships. Data, sourced from the firms' annual reports, were analysed using descriptive statistics, correlation analysis, and logit regression. The findings revealed that higher board expertise is associated with a decreased likelihood of choosing a Big 4 auditor. In addition, the study found that board expertise moderates the relationship between profitability auditor choice. Likewise, the association between liquidity and external auditor choice, is moderated by board expertise. These results suggest that profitable firms are more likely to engage Big 4 auditors, and that board expertise plays a complex role in auditor selection, influencing and moderating the influence of key financial attributes. The study recommends that listed service firms should prioritize both strong financial performance and diverse board expertise, especially in financial reporting and risk management, for optimal auditor selection and corporate governance.

Keywords
Financial attributes auditor choice service companies board expertise.

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Does Board Financial Expertise Influence the Relationship Between Financial Attributes and External Auditor Choice? (2026). Journal of Business Management and Accounting, 16(2), 194-205. https://doi.org/10.32890/jbma2026.16.2.4

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DOI · 10.32890/jbma2026.16.2.4
OpenAlex · W7171846320

References

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