External Auditor Selection Choice: A Multinomial Logistic Regression Approach

Augustine Nwekemezie Odum(1), Egbunike Francis Chinedu(2),

(1) Department of Accountancy, Nnamdi Azikiwe University, Awka, Nigeria
(2) Nnamdi Azikiwe University, Department of Accountancy, Awka, Anambra State, Nigeria


This research work examines the factors that determine the selection of external auditor among Global Brand listed companies in Nigeria. The variables of Audit Big 4 firms which include Deloitte, Klynveld Peat Marwick Goerdeler, (KPMG) and Price Water House Coopers (PWC) where selected as choice target for this research work. Big four audit firm of Ernst’s & Young (E&Y) was excluded in the sample as it is found not to have provided audit services to any of the selected global brand listed company in Nigeria during the period covered by this study. The study employed the methodology of Multinomial Probit Regression (MPR) analysis in X-raying the data. Empirical evidence shows that there is a significant positive relationship between firm size and choice of external auditor’s selection for the big four audit firms of KPMG and Deloitte. The study also provides a revelation that the relationship between the variable of firm size is negative and statistically significant with audit firm of Price Water House Coopers (PWC). The research work carefully recommends that global brand companies in Nigeria with interest to hire audit services of Deloitte and KPMG must ensure that its total asset is significantly large. But suffice to state here that this may not apply to the audit firm of Price Water House Copper Corporation where the variable of audit fee is a significant determinant in the quest for employing it audit services.


Auditor Selection; Global Brand; Multinomial Logit Regression




DOI: https://doi.org/10.32455/ijbfa.v1i2.75


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