AUDITORS' CHARACTERISTICS AND TAX AGGRESSIVENESS OF LISTED SELECTED FAST-MOVING CONSUMER GOODS IN NIGERIA

Abstract

The study investigated the effect of auditors' characteristics on tax aggressiveness among selected
listed Fast Moving Consumer Goods Firms in Nigeria. An ex-post facto research design was adopted
using a sample size of seven listed FMCG firms purposively. Data were extracted from the annual
financial reports of the selected firms between the years 2013 and 2022. Audit fee, auditor's tenure,
and auditor's type ( Big 4 or Non-Big 4) were considered as auditors' characteristics while Effective
Tax Rate (ETR) was adopted as a proxy for tax aggressiveness. Regression analysis was used to
analyze data. The study found that audit fee and audit type had a positive significant effect on an
effective tax rate (ß = 0.236, p< 0.05) and (ß = 0 .181,p<0.05) respectively. Audit tenure had a
negative insignificant impact on the effective tax rate of selected firms (ß = -0.115, p > 0.05). It was
concluded that audit fees and auditor's type had an impact on the tax aggressiveness practices of
FMCG firms in Nigeria. The study, therefore, recommended that management of the firms in FMCG
should reduce audit fees and employ the service non-Big 4 audit firms to maximize the shareholders'
wealth rather than involving in tax-aggressive practices which enriched audit firms.

Keywords: Audit fee, Auditor's Tenure, Audit type, and Tax Aggressivenes