Audit Regulatory Frameworks and Corporate Reporting Quality

Abstract

Audit failures, regulatory gaps, and the erosion of public trust in financial reporting have raised global concerns about the effectiveness of audit oversight. This study investigates the effect of audit regulatory frameworks on corporate reporting quality, using Nigeria as a contextual anchor among emerging markets. It draws on global standards, theoretical models, and empirical findings to explore the conceptual foundations, international perspectives, practical challenges, and policy implications of audit regulation in enhancing auditor independence, professional competence, and financial statement credibility. The findings reveal that while regulatory frameworks have improved audit transparency and internal governance in several economies, their effectiveness remains limited in regulatory authorities with weak enforcement capacity. The study concludes that audit regulation must be globally benchmarked yet locally responsive, emphasizing risk-based supervision, auditor competence, and proactive oversight. It recommends empowering national regulatory institutions such as the Financial Reporting Council of Nigeria (FRCN), adopting AI-enabled audit systems, mandating firm rotation, and enforcing sanctions for non-compliance. These measures are essential for strengthening audit reliability, improving disclosure quality, and rebuilding stakeholder trust across diverse economic settings