CORPORATE GOVERNANCE AND FRAUD PREVENTION: THE ROLE OF AUDITORS IN UNCERTAIN REGULATORY ENVIRONMENTS

Abstract

This study investigates the interplay between corporate governance mechanisms and fraud prevention, focusing on the moderating role of auditors in an uncertain regulatory environment. Drawing on an ex post facto research design, we analyse secondary data from 10 consumer goods firms listed on the Nigerian Exchange Group between 2015 and 2023. Corporate governance is operationalised through board size, board independence, and audit committee size, while auditor quality is captured by engagement of Big 4 versus non-Big 4 audit firms. Fraud prevention is proxied by the incidence of financial restatements. Descriptive statistics reveal that most firms maintain mid-sized boards with over 50 % independence and engage Big 4 auditors, yet restatements remain rare. Correlation and multiple regression analyses indicate that neither governance structures nor auditor engagement, alone or in interaction, significantly predict restatement occurrences (Adjusted R² ≈ 0.01). These findings suggest that structural governance metrics and auditor labels are insufficient to capture the complexity of fraud prevention. We concluded that qualitative assessments of internal controls, investment in technology-driven audit techniques, enhanced audit committee expertise, and improved regulatory transparency are critical for strengthening fraud-prevention mechanisms in emerging-market contexts.