ARTIFICIAL INTELLIGENCE AND AUDIT QUALITY OF LISTED FIRMS IN NIGERIA

ABSTRACT This study addresses the persistent challenges of audit inefficiencies, delayed financial reporting, and weak oversight in Nigerian listed non- financial firms. This study investigates the effects of Artificial Intelligence (AI) adoption on audit quality specifically audit timeliness among Nigerian listed non-financial firms from 2018 to 2023. Despite growing implementation of AI technologies, audit inefficiencies and delayed financial reporting remain persistent in the Nigerian context. Using panel data from 30 purposively selected firms, the study employs robust panel regression techniques to examine how three dimensions of AI adoption AI strategy development, AI governance and ethics, and AI-driven revenue growth affect audit report lag as a proxy for audit quality. Findings show a mixed impact: AI governance and ethics significantly reduce audit report lag, indicating improved audit timeliness due to enhanced transparency and accountability mechanisms. In contrast, AI strategy development and AI-driven revenue growth are associated with increased audit report lag, likely due to the added complexity of reconciling AI-generated financial data and auditors’ limited capacity to assess AI-driven systems effectively. The study concludes that while AI has the potential to improve audit outcomes, its benefits are conditional on strong ethical governance, adequate auditor training, and regulatory support. The study recommends a balanced and well-regulated approach to AI integration that emphasizes not only strategic and revenue gains but also governance and ethical considerations that strengthens audit quality in emerging markets. This research contributes to the literature by providing empirical evidence from Nigeria and extending theoretical understanding of AI’s differentiated effects on organizational performance in the audit context.