TAF PUBLISHING

The audit marketplace is immersed with numerous audit firms varying from big-4 to non big -4 audit firms, thus making the audit selection choice cumbersome for organizations. In this paper, based on the burdensome nature of the dynamics that determine the selection choice of audit firms, we investigated the most significant dynamics that determine audit market choice of quoted companies in Nigeria. The survey research design and questionnaire were used. Five dynamics of audit market choice were identified, namely auditor-client compatibility and mandatory audit firm rotation; market concentration and departure of international accounting firm; governance and accountability; audit fee; and organizational complexity. Data obtained were analyzed via descriptive (frequency count, simple percentages, mean and standard deviation, Pearson correlation and normality test) and inferential (factor analysis) statistical methods. Findings of the principal component analysis (PCA) revealed that the determinants explained about 80.6% of the total variance in audit market choice. The practical implication of the result is that corporate entities base selections of audit firms in the marketplace using audit fees; need to ensure accountability, audit firm rotation, audit-client compatibility and complexity of the organization. Having analyzed the situation of the dynamics determining audit market choice, we found that all the dynamics determine audit market selection choice; however, the factor analysis established that audit fees, accountability, mandatory audit firm rotation, and audit-client compatibility were the most significant dynamics that determine the reasons for the choice of the selection of auditor in the audit market in Nigeria.