AUDIT FEES DETERMINANTS AND CORPORATE FIRM’S GROWTH IN NIGERIA: AN EMPIRICAL EVIDENCE OF FCMB PLC

This study investigates the influence of audit fee determinants on corporate firm growth in Nigeria, with specific focus on First City Monument Bank (FCMB) Plc. The research was motivated by the growing concern that audit pricing structures are significantly influenced by firm-specific characteristics, which in turn affect operational costs and long-term growth. A mixed-method approach was employed, combining primary data from questionnaires administered to 24 staff members of FCMB in Ikot Ekpene Local Government Area with secondary data obtained from the bank’s annual reports. Using simple regression analysis, the study examined two key determinants of audit fees: firm profitability, measured by return on assets (ROA), and leverage, measured by the debt-to-equity ratio (DER). The empirical findings revealed that profitability has a significant positive effect on audit fees, indicating that firms with higher ROA attract increased audit costs due to greater transaction complexity and the need for enhanced assurance. Similarly, leverage was found to significantly affect the level of audit fees, with highly leveraged firms perceived as riskier, thereby requiring more rigorous audit procedures and higher pricing. These results underscore that audit fees are not arbitrarily determined but are largely shaped by financial performance and capital structure. The study contributes to knowledge by linking audit pricing to firm growth in the Nigerian banking sector, providing both theoretical and practical insights. It further recommends that FCMB Plc and other Nigerian firms should adopt efficient financial management strategies that improve profitability while keeping audit-related complexities manageable. This will help reduce excessive audit costs that may arise from inefficient reporting processes.