INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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Moderating Role of Chief Executive Officer Gender on the Relationship
Between Audit Quality and Growth of Federal Teaching Hospitals in
Nigeria
AYENI, Abdulhakeem Adeyemi, IBRAHIM, Kamaluddeen F.A. (PhD), POPOOLA, Muhammad Lanre
Department of Accounting, University of Abuja, Nigeria
DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000579
Received: 25 October 2025; Accepted: 30 October 2025; Published: 18 November 2025
ABSTRACT
Audit Quality is a crucial instrument for ensuring transparency and accountability in both the public and private
sectors. This study sought to investigate the moderating role of CEO gender on the relationship between audit
quality and growth of federal teaching hospitals in Nigeria. The population of the study consists of twenty-one
(21) federal teaching hospitals in Nigeria and the twenty (21) were selected as sample due to sparsity of data.
Secondary data were collected from audited annual reports and accounts of the selected federal teaching hospitals
from 2015 to 2022 and were analyzed using Residual Maximum Likelihood (REML) Estimate. Among the
findings are that auditor’s knowledge has a positive significance on growth, while the auditor’s tenure is
positively significant with growth. CEO gender, however, do not significantly moderate the relationship between
audit tenure and growth as it does for auditor’s knowledge as a measure of audit quality. The study recommends
that federal teaching hospitals in Nigeria should focus more on auditor’s knowledge or specialization in the
public health sector when making decisions on appointment of external auditors.
keywords: Nigeria, growth, CEO gender, audit quality, federal teaching hospitals
INTRODUCTION
Auditing and audit procedures in general, are monitoring tools that serves the purpose of aiding to reduce
information asymmetry, thereby, protecting the welfare of different stakeholders by ensuring that companies’
financial statements are free from substantial misstatements. The belief of stakeholders, hence, is that auditors
have a fiduciary role of significantly contributing to both financial reporting and financial performance. This
stands to lower the risk of severe misleading statements by guaranteeing that financial statements are prepared
in accordance with established standards, regulations and norms. Expectedly, auditors are considerably
independent in their judgments, even when the tasks performed to gather evidences and form their opinions are
heavily relied and rooted in available records from clients. Given the presumed importance of high-quality audit,
studies have carefully examined such attributes that drives the quality of audit within firms (Monye-Emina &
Jeroh, (2014); Jeroh, Ekwueme & Okoro, 2015).
Auditor has the duty for the prevention, detection and reporting of fraud and errors. This is one of the most
controversial issues in auditing, and has been one of the most regularly debated areas amongst auditors, the
public and regulators. This argument has been mostly highlighted by the collapsed of both small and big
organizations across the globe. According to Heil, (2012), ‘‘The Financial Statements audit is a monitoring
system that helps reduce information asymmetry and protect the interests of the various stakeholders by
providing reasonable assurance that the management’s Financial Statements are free from material
misstatements. The societal role of auditors should be a key contribution to Financial Performance, in terms of
reducing the risks of significant misstatements and by ensuring that the Financial Statements are elaborated
according to preset rules and regulations. Lower risks on misstatements increase confidence in capital markets,
which in turn lowers the cost of capital for firms.’’
Audit quality defined in two perspectives: Detecting misstatements and errors in financial statements and
reporting these material misstatements and errors. Due to the fact that these characteristics are largely
unobservable, different proxies have been used by researchers to measure audit quality vis-a-vis: audit size, audit
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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hours, audit fee and reputation. In the stakeholder theory, the perceptions of audit quality vary amongst
stakeholders depending on their level of direct involvement in audits and on the perspective through which they
assess audit quality. Audit quality may be perceived from any of three fundamental perspectives vis-a-vis: inputs,
outputs, and context factors, Hu (2015).
Statement of the Problem
The imperativeness of audit quality and firms’ performance has been well documented (Monametsi & Agasha
2020). The audit reports are the medium of communication between auditors and the users of financial
statements. Hence, it must be understandable, objective, and acceptable as relevant sources of information. The
quality and credibility of financial statements depend on audits (Siregar & Nuryanah, 2019). The audit firms are
expected to have reasonable and sound financial efficiency. Performance and growth have become important
issues for government’s statutory corporations and parastatals globally. Ensuring growth is a function of how
efficient are the internal control systems and the external audit process.
While there has been growing body of research locally and globally, pertaining to audit quality and firms’
performance since the 1960s, no real consensus has been reached. Previous study has investigated audit quality
and firm performance and result showed that audit quality has a negative but non-significant predictor of firm
performance (Monametsi & Agasha, 2020). While some have equally shown that the quality of the audit
enhanced financial performance of firms (Usman, Sohail & Rashid, 2020).
In view of this mixed nature of results in this area of research, there is need for further investigations to narrow
the gap. Moreover, the quantum of research in this area with regard to the Nigerian environment have focused
on Banking, Insurances and Manufacturing Sectors. There is a limited study on the significant measures of audit
quality and those of growth of federal institutions in Nigeria. This makes the present study imperative and
necessary as it seeks to fill the gap by investigating the moderating role of CEO gender on the relationship
between audit quality and growth of Federal Teaching Hospitals in Nigeria. This is because Federal Teaching
Hospitals were either created by the Constitution of the Federal Republic of Nigeria or Acts of the National
Assembly and they are required to engage services of External Auditors to audit their financial statements and
report therein on annual basis. The audited reports are to be submitted to the Office of the Auditor General for
the Federation for vetting and comments, and for onward submission to the National Assembly in line with
Section 85(3)(b) of the 1999 Constitution (as amended) of the Federal Republic of Nigeria.
This study, therefore, extended the frontier of knowledge by investigating the moderating role of CEO gender
on the relationship between audit quality and growth of Federal Teaching Hospitals in Nigeria.
Objectives of the Study
The main objective of this study is to investigate the moderating role of CEO gender on the relationship between
audit quality and growth of Federal Teaching Hospitals in Nigeria.
The specific objectives are to:
1. Establish the relationship between auditor’s knowledge and auditor’s tenure and growth.
2. Evaluate the moderating effect of CEO gender on the relationship between audit quality and growth.
Research Questions
The following questions were raised in order to answer the objectives of the study:
1. Is there a significant relationship between auditor’s knowledge and auditor’s tenure and growth?
2. Does CEO gender moderate the relationship between audit quality and growth?
Statement Of Hypotheses
The following hypotheses were set and tested:
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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Ho
1
Auditor’s knowledge and auditor’s tenure do not have significant effect on hospitals’ growth.
Ho
2
CEO gender moderator has no significant relationship between audit quality and growth.
The Significance of the Study
This study provides a better picture in the following ways:
Contribution to existing knowledge in terms of investigating the moderating role of CEO gender on the
relationship between audit quality measured by (auditor’s knowledge of the sector and auditor’s tenure) on their
effect on the Federal Teaching Hospitals growth in Nigeria to enable us provide new insight into audit quality
and growth relationship.
The Scope of the Study
This research study covered period of eight (8) years from 2015 to 2022 financial period. The study was
conducted on twenty-one (21) selected Federal Teaching Hospitals in Nigeria. However, the scope for the period
of eight (8) years from 2015 to 2022 was due to the availability of required data.
LITERATURE REVIEW AND THEORETICAL FRAMEWORK
Conceptual Review
The conceptual diagram below showed the direction of moderating variable on the relationship between audit
quality and growth.
Independent Variables Dependent Variables
Source: Researcher’s Conceptualization
The Concept of Audit Quality
Different stakeholders defined audit quality in different ways based on their usefulness. For example, users of
financial statements consider high-quality audit to be one that prevents significant inaccuracies in the financial
statements. On the other hand, society and audit firms may consider a high-quality audit as one where the
organization can successfully withstand litigation. There may be no agreed-upon definition of audit quality that
can be used as a measure of performance. Based on this challenge, regulators have sought to determine audit
quality with a mixed framework. Hu (2015) put forth a framework that combined the regulators and academic
viewpoints. The article identified three key drivers of audit quality, which are: input, output and context of the
audit and suggested measurements.
Therefore, the audit quality is an important indicator for investors and other users of financial statements. The
needs for trustworthy and reliable financial statements are imperative for making reliable decisions in corporate
organizations. This is because both current and potential investors, government and all other stakeholders relied
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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on the financial statements for investment decisions and any other contractual relationship with the reporting
entity. However, these financial statements are prepared by management and presented to the entire users for
their varying needs. The authenticity and reliability of these financial statements is always doubtful and
questionable; hence, management may manipulate the reports for their personal selfish goals. With regards to
lack of confidence in the reported financial statements, the demand for the services of an external auditor
becomes compulsory to prevent, detect, monitor, and report fraud and other illegal activities and errors if found
in the financial reports.
Audit quality is an imperative tool of a strong equity market, for that reason, an audit can raise the worth of
financial statements and directly encouraged the corporate growth activities with translucent financial reporting
(Chow, 1982). The audit quality helps to improve the performance of firms (Al Ani & Mohammed, 2015). The
large firms invest handsome amounts of funds to reduce audit errors and faults, which results in the shape of
good performance (DeAngelo, (1981) & Beatty,1989). The improved quality of the financial reporting of the
firms is associated with an effective audit quality (Guedhami, Pittman & Saffar,2014). The degree of auditor
independence matters for the best quality of an audit, which leads to better performance of the firms (Matoke &
Omwenga,2016).
The Concept of Growth
Afza & Nasir (2014) maintained that investors opined that quality of external audit improves a firm’s
performance. They affirmed that companies that are audited by reputable audit firms are likely to disclose
reliable, proper, and authentic information than their counterparts that are audited by small audit firms. This
reliable information is capable of wooing investors and customers to the firm leading to better performance
which is reflected in the firm's sales growth, increase in profit, investment and share capital.
Empirical Review
Matoke and Omwenga (2016) studied the relationship between audit quality and financial performance of listed
companies in Nairobi Securities Exchange. The study adopted a descriptive research design. The sampling frame
of this study was drawn from directories of the Nairobi Securities Exchange Limited; consisting of all the 9 listed
companies in Kenya. A total of 826 CPAs working in the 9 listed companies in Kenya. The study used simple
random sampling to select 89 respondents since the study population was homogenous. Both primary and
secondary data were used. Data were analyzed by multiple linear regression analysis. Findings of the study
indicated that the effect of audit quality on financial performance is positive and significant and the greater the
degree of an auditor’s independence, the greater the propensity of a firm making substantial net profit margins.
The impact of auditor size was also positive and significant, although, its impact was lesser than that of auditor’s
independence.
Ezejiofor and Erhirhie (2018) investigated the effect of audit quality on the financial performance of deposit
money banks in Nigeria. The study adopted ex post facto research design, data for the study were collected from
annual reports and accounts of quoted Nigerian Deposit Money Banks. Regression analysis and coefficient
correlation were employed to test the formulated hypotheses. Findings revealed that there is a significant effect
between audit quality and financial performance of Nigerian Deposit Money Banks.
Iliemena and Okolocha (2019) examined the effect of audit quality on financial performance of industrial goods
companies in Nigeria. The researchers utilized audit firm rotation (AFR) and audit fees (AUF) as proxies for
audit quality while financial performance was measured using return on asset (ROA). Descriptive and Ex-post
facto research designs were adopted while the scope of the study covered 2012-2018. The population and sample
of study consists of twenty-four (24) industrial goods companies listed on Nigerian Stock Exchange as at 4th
September 2019. Results showed that audit firm rotation and audit fees both have significant positive effect on
return on asset, thus, audit quality has significant positive effect on financial performance.
Ivungu, Anande and Ogirah (2019) reviewed extant literature on concepts, theories and empirical studies that
related to audit quality and firm performance. The study found different ways of measuring audit quality in
literature which include audit firm size, audit firm rotation, audit opinion, audit fees, audit tenure and auditor
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independence while firm performance is measured in terms of financial and market performance of the firm.
Findings from past studies revealed that audit quality affect firm performance either positively or negatively.
Some studies documented positive relationship between certain audit quality proxies and firm performance
measures; others show negative relationship between these variables.
Ramadhani and Eliada (2020) studied factors that affect audit quality. The research population is all auditors at
a public accounting firm in Jakarta. This research used a purposive sampling technique with some criteria for
the research sample. The research sample obtained was 89 respondents. This research used survey technique as
collecting the data with sharing questionnaire and multiple linear regression with SPSS software for the data
analysis technique. The result indicated that auditor experience and knowledge of detecting errors have a positive
effect and significant on audit quality, whereas auditor professionalism, time budget pressure have a positive
effect but not significant on audit quality and audit tenure have a negative effect but not significant on audit
quality to the auditors at a public accounting firm in Jakarta.
Usman, Sohail, and Rashid (2020) examined the role of the product market competition (PMC) in the relation
between the audit quality and firm performance. Ordinary Least Squares (OLS), the fixed-effect model, and the
generalized method of moment (GMM) were used to examine the role of PMC on the association between the
audit quality and financial performance. Selected the Pakistani manufacturing sector and used panel data for the
period from 2010 to 2017. The results of the study revealed that the financial performance of firms was enhanced
with the quality of the audit.
Monametsi and Agasha (2020) analyzed the impact of audit quality on firm performance of listed companies in
Botswana, and Uganda. The study sampled domestically listed financial and non-financial companies on the
stock exchanges of Botswana and Uganda for the five years 2014-2018. Using auditor size and audit fees as
proxies for audit quality and ROA, and Tobin's Q as measures of firm performance, the relationship between the
variables was determined through regression analysis. Results showed that audit quality is a negative but non-
significant predictor of firm performance for financial performance.
Ozegbe and Jeroh (2022) examined audit quality attributes as possible determinants of companies’ financial
performance. The study drawn data from quoted companies on Nigeria Stock Exchange covering 10 years (2011
to 2020). The study adopted the Panel Least Square technique, descriptive analysis and relevant diagnostic tests
as part of the tools used in analyzing the data collected. The results revealed that audit independence exerts
significant negative influence on ROA; audit tenure and audit firm size had positive relationship with ROA,
although, this relationship was not significant. Conversely, statutory audit service on its own significantly
influenced firm performance (ROA).
Zahid, Taran, Khan and Chersan (2022) investigated the relationship between environmental, social, and
governance (ESG) scores and dividend policies, considering the moderating role of audit quality. Based on data
for Western European listed companies (leaders in ESG revolution) over the period 2010–2019, panel regression
analyses show a significant positive relationship between ESG and dividend payouts. Audit quality also a
negative moderating effect on ESG–dividend links, prevalent at the firms whose financial audit is conducted by
Big Four auditors, with no statistically significant results for ESG assurance quality. The findings are robust to
sensitivity analyses based on alternative measures and estimation techniques.
Mesbah and Ramadan (2022) examined the effect of audit quality on financial reporting quality. Variables were
measured using secondary data obtained from the financial statements of 152 firms listed in the Egyptian stock
market in the period from 2016 to 2020 representing 608 firm-year observations, excluding non-financial firms
due to their special nature. Results provided evidence of a positive relationship between audit firm size and audit
firm fees on one hand and financial reporting quality on the other. However, results showed a negative
relationship between audit firm tenure and financial reporting quality.
Afifa and Saleh (2023) studied the impact of audit quality on company performance from the Jordanian market.
A panel data analysis of all Jordanian industrial public shareholding companies listed on Amman Stock
Exchange during the period 2012 to 2017 were used. It was found that auditor tenure has a negative influence
on ROA, but auditor industry specialization and auditor firm size have no influence on ROA. Auditor firm size
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has a positive influence on both ROE and EPS, but auditor tenure and auditor industry specialization have a non-
significant negative influence on both ROA and EPS.
Santi, Dicky and Dwiyanti (2023) identified audit quality in several cases that occurred in Indonesia by using
audit quality indicators in the form of ethics, people, process, output, and interaction. The research method uses
a qualitative descriptive method with the object of analysis in the form of audit quality indicators. The results
indicated that the audit ethics quality indicators have the most influence on several cases that occurred in
Indonesia.
Yayangida, Ahmed, Nyor and Yahaya (2023) examined the moderating role of audit committee’s independence
on the effect of audit fees and the financial reporting quality of listed non-financial services firms in Nigeria.
Audit committee’s independence was measured by the ratio of independent director in the audit committee to
total audit committee members. Audit fee was measured by logarithms of audit fee while financial reporting
quality was measured by discretionary accruals. The study employed 30 non-financial services firms listed on
the Nigerian Exchange Group over a period of 11 years from 2011 to 2021. Descriptive statistics and multiple
regression analysis techniques were used for data analysis. Findings revealed that audit fee does not have a direct
effect on financial reporting quality of listed non-financial services firms in Nigeria. However, the effect of audit
fees on financial reporting quality is statistically significant when moderated by audit committee’s independence.
Obafemi, Oyerinde, and Muhammed (2023) examined the impact of audit quality on financial performance of
banking industries in Nigeria. The study used secondary data from sampling banks' annual financial statements
from 2004-2019 on the NSE. Ex-post facto study design and descriptive statistics and OLS multiple regression
estimation were used. Audit company size (AFS) and audit fee (AF) boost firm performance, whereas Audit
Report Lag (ARL) hurts Nigerian banks' performance. Only audit fee (AF) was statistically insignificant
(p>0.05); audit firm size (AFS) and audit report lag (ARL) were significant (p0.05). Without enough effort to
monitor the financial performance of banking businesses in Nigeria, they will continue to stray from reporting
correct profits figures by providing earnings data that appear lovely but are not genuine, deceiving investors and
other stakeholders. A long association between the auditor and his client may threaten independence and audit
quality due to personal ties and familiarity. This will reduce the Auditor's vigilance and favoritism toward the
company's senior managers.
Shella and Ari (2023) determined the effect of audit tenure and audit fee on audit quality, with audit committee
quality as a moderating variable. The secondary data for the study from annual financial reports of non-cyclical
consumer sector companies listed on the Indonesia Stock Exchange for the 2019-2021 period, by taking samples
using a purposive sampling technique was analyzed with a fixed-effect regression model. 125 data samples were
used in this study. The results of this study indicated that tenure audits have a negative effect on audit quality,
while audit fees do not affect audit quality, related to audit committee quality as a moderating variable that can
strengthen the positive influence of tenure audits on audit quality, but audit committee quality has not been able
to moderate the influence of audits fee for audit quality.
THEORETICAL REVIEW
Theories such as agency theory, stakeholders’ theory and inspired confidence theory were reviewed in this study.
Agency Theory
In this study, the agency theory (Jensen & Meckling, 1976) was applied as a theoretical framework. Agency
theory encapsulates the problem of owner versus agent and has been used extensively in the finance and
accounting literature. Specifically, it has been used to explain the relationship between external auditor
performance and function (Adams, 1994). The theory postulates that problems arise when interests are
misaligned and where informational asymmetry exists between the agent and the owner. The main contention is
that agents will make potentially prejudicial and onerous decisions to shareholders in order to benefit themselves.
This type of opportunistic behaviour can lead to poor financial performance. The information asymmetry that
exists between principal and agent requires a redress in order to improve information about company
performance. External audits act as a monitoring tool that reduces information asymmetry. Therefore, the greater
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the information asymmetry, the higher the demand for higher quality audits and vice versa (Farouk & Hassan,
(2014); Gunn, Hallman, Li & Pittman, 2017).
Agency theory has been widely used in literature to investigate the information asymmetry between principals
(shareholders) and agent (management). This study uses the agency theory to determine the moderating role of
CEO gender on the relationship between audit quality and corporate growth of Federal Teaching Hospitals in
Nigeria. Sarens & Abdo (2007), states that according to the agency theory, a company consists of a set of linked
contracts between the owners of economic resources (the principals) and managers (the agents) who are charged
with using and controlling these resources. Jensen & Meckling (1976), states that in agency theory, agents have
more information than principals and this information asymmetry adversely affect the principals’ ability to
monitor whether or not their interests are being properly served by the agents. Jensen & Meckling (1976) opined
that moral hazard constitutes a situation where to maximize their own wealth; agents may face the dilemma of
acting against the interests of their principals. Since principals do not have access to all available information at
the time a decision is being made by an agent, they are unable to determine whether the agent’s actions are in
the best interest of the corporation. To reduce the likelihood of the moral hazard, principals and agents engaged
in contracting to achieve optimality, including the establishment of monitoring processes such as auditing. The
principal-agent relationship as depicted in agency theory is important to understanding how the role of an auditor
has developed. Principals appoint agents and delegate some decision-making authority to them. In so doing, the
principals place their trust in their agents to act in the principals’ best interests.
Stakeholders Theory
Stakeholders Theory can be defined as any group or individual who can affect or is affected by the achievement
of the organization’s objectives. The theory begins with the assumption that values are necessarily and explicitly
a part of doing business. Stakeholders’ theorists suggested that managers in organizations have a network of
relationships to serve, that is, the suppliers, employees, lenders and other business partners. Accordingly,
Sundaram & Inkpen (2004) acknowledged that the stakeholders theory attempts to address the group of
stakeholders that require management’s attention. Many firms have developed and run their businesses in terms
highly consistent with stakeholders’ theory.
Inspired Confidence Theory
Developed by the Limperg Institute in Netherlands in 1985, the theory of inspired confidence states that ‘‘the
auditor, as a confidential agent, derives his broad function in the society from the need for expert and independent
examination as well as the need for an expert and independent judgement supported by the examinations. Thus,
accountants and auditors are expected to know and realize that the public continues to expect a low rate of audit
failures. This requires that the auditors must plan and perform their audit in a manner that will minimize the risk
of undetected material misstatements. The accountant is under a duty to conduct his work in a manner that does
not betray the confidence which he commands (Limperg Institute, 1985).’’ The importance of the theory of
inspired confidence is that the duties and responsibilities of the auditors are a derivation from the confidence
that are bestowed by the public on the success of the audit process and the assurance which the opinion of the
accountant conveys. Since this confidence determines the existence of the process, a betrayal of the confidence
logically means a termination of the process or function. The social importance of the audit, stated that when the
confidence that the society has in the efficiency of the audit process and the audit reports is lost, the value
relevance of that audit is diminished. Therefore, auditors are expected to maintain reasonable quality assurance
especially given that an audit failure is effectively a career-ending event. Audit provides assurance to the owners
and management of companies and to investors and stakeholders, and along with financial reporting, corporate
governance and regulations, supports confidence in the capital markets. The theory of inspired confidence
(Theodore Limperg) addresses both the demand and the supply for audit services. The supply is the level of audit
assurance that the auditor should provide. The demand is the direct consequence of the participation of outside
stakeholders (3rd parties) in the company.
THEORETICAL FRAMEWORK
The Inspired Confidence Theory forms the theoretical key for this study. This is because it is a foundational
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theory of audit quality which derives its broad function in the need for expert and independent examination as
well as the need for an expert and independent judgement supported by the examinations. The theory is the focal
point because it requires that the auditors must plan and perform their audit in a manner that will minimize the
risk of undetected material misstatements, errors and fraud in the entity.
METHODOLOGY
Research Design
The study adopted ex-post facto. Ex post facto is a non-experimental research design in which pre-existing group
are compared on some dependent variables. This study adopted ex-post facto because it allows the pre-existing
independence variables prior to the study to be held constant and serve as control group for the stated hypotheses.
Population of the Study
The population for the study is twenty-one (21) federal teaching hospitals in Nigeria, therefore, the population
size is 21.
Sample of the Study
For a hospital to be selected as a sample, it must have engaged the service of external auditors for at least two
(2) years as evidenced in the annual reports. The critical review of the annual reports of all the federal teaching
hospitals indicated that all the federal teaching hospitals met the requirements for the selection. Hence, the
sample is twenty-one (21) hospitals with unequally space period ranging from 2 to 7 years with a total of 67
observations.
Method of Data Collection
The data for the study are secondary data and were sourced from annual reports and accounts of the twenty-one
(21) Federal Teaching Hospitals. The annual reports and accounts of the selected Federal Teaching Hospitals
were analyzed covering a period of 8 years starting from 2015 to 2022.
Model Specification
This research adapted the model of Afifa & Saleh (2023), to investigate the moderating role of CEO gender on
the relationship between audit quality and growth of Federal Teaching Hospitals in Nigeria. The model was
applied to measure the impact of audit quality on financial performance of industrial companies listed in
Jordanian industrial sector. A variant of the model is given as:
ROA
it
= β₀ + β₁SIZEit + β₂TE-TAit + β₃WCit + β4ATit + β5AISit + β6AFSizeit +εit
The above model was adapted by replacing ROA with Assets Growth Rate (AGR). The use of AGR instead of
ROA is similar to the approach of Usman, Sohail, & Rashid (2020). Similarly, the AT in the above model was
renamed AUDT, while AIS was renamed AUDK in the adapted Model 1 given below as:
AGR
it
= β₀ + β
1
AUDTit + β
2
AUDKit + εit-------------- (1)
The next model investigated the moderating effect of CEO gender on the relationship between audit quality and
growth of Federal Teaching Hospitals in Nigeria. Model 1 above is extended as follow:
AGR
it
= β₀ + β
1
AUDTit + β
2
AUDKit + β
3
CEOGENDERit + β
4
AUDKit*CEOGENDERit +
β
5
AUDTit*CEOGENDERit +εit-------------- (2)
Finally, the direct effect of size was controlled by replacing SIZE in Afifa & Saleh, (2023), Model with board
size (BSIZE). Hence, Model 2 above is extended as below:
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AGR
it
= β₀ + β
1
AUDTit + β
2
AUDKit + β
3
CEOGENDERit + β
4
AUDTit*CEOGENDERit +
β
5
AUDKit*CEOGENDERit + β
6
BSit + εit-------- (3)
Where AGR
it
= Assets Growth Rate
AUDT
it
= Auditor’s Tenure
AUDK
it
= Auditor’s knowledge of the Sector
CEOGENDER
it
= Chief Executive Officer Gender
BS
it
= Board Size
β
o
=
Constant parameter
β
1-
β
6
= Coefficients of the explanatory variables
E
it
= Error term
i
= Subscript for individual hospital used in the study
Variables Measurements and Definitions
Table 1 shows the matrix of the measurement schemes.
Table: Variable Measurement Matrix
S/N
Variables
Measurement
Sources
1
AKS
A dummy variable that is set to (1) if the entity has sector
specialization (10% of total audit firm customers in the public
sector) and (0) otherwise
Afifa, M.A, and
Saleh, I.H., (2023)
2
AT
A dummy variable that is set to (1) if the entity has been
audited by the same audit firm for more than three years, and
(0) otherwise
Afifa, M.A, and
Saleh, I.H., (2023)
3
AGR
AGR = TA
t+1
-TA
t0
x100
TA
t0
Damagum Y.M,
Ayeni A.A, and
Obasa R.S, (2021)
4
CEO
Gender
(0) Represent Male CEO
(1) Represent Female CEO
Usman S., Sohail
A.J, and Rashid L.,
(2020)
5
Board Size
The total number of Board members
Usman S., Sohail
A.J, and Rashid L.,
(2020)
Source: Researcher’s Review
Techniques For Data Analysis
For large N dataset relative to T, the Ordinary Least Square (OLS), Fixed Effect Estimates (FE), and Weighted
GLS Random Effects Estimator (RE-GLS) model are consistent and efficient if their assumptions are true. The
consistency of OLS, FE, and RE-GLS are, however, questioned in a severe unbalanced data setting. Thus, Baltagi
(2021) proposed the use of ANOVA based Generalized Least Square (i.e. EGLS), Maximum Likelihood (ML),
and Restricted or Residual Maximum Likelihood (REML) in estimating the coefficient parameter, with the latter
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two estimators (i.e. ML and REML) more suitable for estimating the variance parameter when the pattern of
unbalanceness in the data is severe with unequal time period. This research used the REML as the techniques of
data analysis, due to the unbalanced nature of the dataset in this study and its ability to estimate the variance
component more efficiently in addition to possibility of accommodating possible heterogeneity, endogeneity,
non-normality, and autocorrelation issues in the data. The REML was preferred to the ML alternative due to the
strict residual normality assumption of the ML, an assumption that is likely not to be met in financial data.
Data Presentation and Analysis
Data Presentation
The data relating to the variables both independent and dependent used in this study were clarified, constructed
and tabulated to suit regression model specified for purposes of the study.
Descriptive Analysis
The descriptive analysis majorly consists of two components which were the descriptive statistics and the
correlation analysis. The descriptive statistics includes: measure of central tendency, moment and dispersion.
These measures included the mean, median, minimum, maximum, standard deviation, skewness and kurtosis.
The correlation analysis on the other hand applied the point biserial correlation techniques since the independent
variables e.g. AUDT, AUDK, and CEOGENDER are dummy or binary responses of 0 and 1.
Descriptive Statistics
The descriptive statistics reported in table 4.1 below was aimed at exploring and describing the underlying
characteristics of the audit quality, board size, and growth variables selected for the study. The descriptive
statistics basically includes the mean, median, standard deviation, skewness, kurtosis, and range.
Table 4.1: Descriptive Statistics of Variables
AGR
AUDK
AUDT
BSIZE
CEOGENDR
Mean
15.01047
0.671642
0.865672
14.29851
0.820896
Median
0.078508
1
1
14
1
Maximum
994.4027
1
1
17
1
Minimum
-0.11224
0
0
12
0
Std. Dev.
121.465
0.47316
0.343578
1.414373
0.386334
Skewness
8.000885
-0.73099
-2.14467
-0.1188
-1.67377
Kurtosis
65.0145
1.534343
5.599617
2.433607
3.801515
Jarque-Bera
11451.01
11.96375
70.22849
1.053159
33.07703
Probability
0.0000
0.002524
0.0000
0.590622
0.0000
Observations
67
67
67
67
67
Source: Stata Output 2025
Table 4.1 above shows that AGR, AUDK, AUDT, and BSIZE averaged 15, 0.67, 0.87 and 14 respectively. The
highest value for this variable was pegged at 994.4 and 17 members for AGR and BSIZE respectively and 1 for
AUDT, AUDK and CEO Gender, while the lowest value was -0.112, and 12 members for AGR and BSIZE
respectively and zero for the rest variables. The audit tenure and auditor knowledge of the sector and CEO gender
variables were dummy variables with highest value been 1 corresponding to presence of the sufficient auditor
knowledge of the sector and audit tenure as well as the CEO being male, while 0 corresponding to insufficient
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audit tenure, auditor knowledge of the sector and the CEO being female.
The moment statistics based on the skewness, kurtosis, and Jarque-Bera Statistics suggested that all variables in
the research are highly peaked and skewed with the exception of BSIZE which had low degree of skewness.
Overall, the assumption of normality is rejected for all the panel series or variables reported in table 4.1 above,
at a maximum significance level of less than 1% (Prob 0.0025), except for BSIZE whose assumption of normality
could not be rejected at the conservative 10% significance level (Prob. 0.5906).
Correlation Analysis
The correlation analysis explores the bivariate relationship between the dependent variable (AGR) and each of
the independent variables (i.e. AUDT, AUDK, CEOGENDR, and BSIZE) as well as the bivariate relationship
between the four independent variables using the point bi-serial correlation methods for relationship between a
dummy or binary variable and a continuous variable and Pearson product moment correlation coefficient for
relationship between two continuous variables.
Table 4.2: Correlation Matrix
AGR
AUDT
AUDK
CEOGENDR
BSIZE
AGR
1
AUDT
0.0443
1
{0.7119}
AUDK
0.0842
0.0260
1
{0.4885}
{0.8027}
CEOGENDR
0.0537
0.0402
-0.0675
1
{0.6563}
{0.6959}
{0.5182}
BSIZE
0.2122
-0.1259
-0.0228
-0.0829
1
{0.0735}
{0.2167}
{0.8266}
{0.4197}
Source: Stata Output 2025
Note: Value in { } are P-values
The results of table 4.2 above, showed that the relationship between the growth measured as assets growth rate
and many of the independent variables (i.e. AUDT, AUDK, CEOGENDR) are positive and insignificant at more
than 10% significance level. An exception is the BSIZE variable with a moderate positive relationship (rho
0.212) at 10% significance level (Prob. 0.0735).
Similarly, there exist an insignificant positive relationship between AUDT, AUDK, and CEOGENDR at more
than 10% significance level (rho. 0.02- 0.04; Prob 0.69- 0.80), and a negligible negative (rho. -0.125) relationship
between AUDT and BSIZE at more than 10% significance level (Prob. 0.216). Moreover, the bivariate
relationship between AUDK and CEO gender, as well as AUDK and BSIZE was negative (rho. -0.067 and -
0.0228 respectively) and insignificant at more than 10% level (i.e. Prob 0.5182 & 0.8266).
Finally, table 4.2 above suggested an insignificant negative (rho. -0.0829) relationship between CEO gender and
BSIZE at more than 10% significance level (Prob. 0.4197).
Normality Test
The white test for non-normality of the residual rejects the null hypotheses of normality of the residual for all
the three-model specification at less than 0.1% significance level (Prob. 0.0000). This result suggested that the
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residual may not follow a normal distribution which is a necessary classical requirement for the un-biasness of
OLS estimator.
Heteroskedasticity
To investigate whether the residual or fitted value have a constant variance, the Breusch Pagan Langrage
Multiplier (BP-LM) Test, Breusch Pagan -Cook Weisberg (BP-CW) Test, and the White Test for
Heteroskedasticity are implemented. The result shows that the null of constant variance or homoskedasticity
could not be rejected for model 1 and 2 at 10% significance level (Model 1 Prob. 0.4126, 0.6888 and Model 2
Prob. 0.2906, 0.5566) under assumption of IID error for BP-CW and White S test respectively. Meanwhile, the
null of constant variance was rejected for model 3 at 5% and 1% significance level (Prob. 0.0309, 0.0033) under
assumption of IID error for BP-CW and White S test respectively. As such only fitted value for model 3 exhibit
a non-constant variance.
Autocorrelation
The Wooldridge and the Bias-corrected Born and Breitung LM(k) test for Serial Autocorrelation was
implemented on the data. The Wooldridge test reject the null hypotheses of no first or K order serial
autocorrelation for all model 1 at less than 0.1% significance level (prob. 0.000) with the F test ranging from
28.27 and more than 30.57.
In contrast, the LM (1) statistic of -1.02 (Prob. 0.306), LM (2) stats of -1.04 (Prob. 0.299) for Model 3 suggest
no evidence of autocorrelation of order 1 and 2 respectively. For model 2, the LM (1) stats of -1.03(Prob. 0.304)
and LM (2) stats of -1.04 (Prob. 0.304) also suggest the null of no autocorrelation of order 1 and 2 and cannot
be rejected. Finally, for the basic model i.e. model 1, the LM (1) and LM (2) stats of -1.03 (Prob. 0.305) implies
that the null hypotheses of no autocorrelation of order 1 and 2 cannot be rejected at more than 10% significance
level.
Inferential Analysis
For this purpose, regression model was tested.
Effect Of Audit Quality On Growth
Table 4.3 below presents the result of the basic model investigating the moderating role of CEO gender on the
relationship between audit quality and growth using the REML estimator.
Table 4.3: Effect of Audit Quality on Growth
Dependent Variable: AGR
Variable:
Coef.
Std. err.
t
P>t
AUDK
0.1274
0.0153
8.3100
0.4180
AUDT
0.0641
0.0165
3.8900
0.2660
_cons
-0.0006
0.0120
-0.0500
0.9920
Fit Statistics
F
38.32
Prob > F
0.0004
R
2
0.0118
Adj. R
2
0.0113
Source: Stata Output 2025
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Table 4.3 above, showed that audit quality has no significant effect on growth of Federal Teaching Hospitals in
Nigeria. More specifically, 1 unit increase in auditor’s knowledge of the sector will lead to weak increase in
growth by 0.1274 at more than 10% significance level (Prob. 0.4180). 1 unit increase in auditor’s tenure on the
other hand, will insignificantly increase growth by 0.0641 at more than 10% significance level (Prob. 0.2660).
In terms of model fit, F-statistics value of 38.32 (Prob. 0.0004) indicated that the model in table 4.3 above fit the
data well at less than 1% significance level. The adjusted R-squared implies that the explanatory variable model
in table 4.3 above explained 1.13% of variance in growth rate, while the remaining variance of 98.87% is
unexplained.
Moderating Effect Of Ceo Gender
Furthermore, the model reported in table 4.3 above was improved upon by exploring the direct impact of the
CEO gender as well as its moderating effects on the relationship between audit quality mechanism and growth
mechanism. The result specifically focuses on the moderating effect of CEO gender on auditor’s knowledge of
the sector (AUDK), and audit tenure (AUDT). The result was reported in table 4.4 below.
Table 4.4: Moderating Effect of CEO Gender
Dependent Variable: AGR
Variable:
Coef.
Std. err.
t
P>t
AUDT
0.0394
0.1358
0.2900
0.7730
AUDK
-0.0368
0.1082
-0.3400
0.7340
CEOGENDR
-0.0334
0.1111
-0.3000
0.7690
CEOGENDR*AUDK
0.1950
0.1104
1.7700
0.0810
CEOGENDR*AUDT
0.0081
0.1366
0.0600
0.9530
_cons
0.0340
0.1111
0.3100
0.7610
Fit Statistics
F
22.27
Prob > F
0.0038
R
2
0.016
Adj. R
2
0.016
Source: Stata Output 2025
The result reported in table 4.4 above suggested that even though, CEO gender have an insignificant direct
negative impact on growth, its moderately impact auditor’s knowledge, significantly at 10% significance level.
Specifically, having male CEO reduces growth insignificantly, by -0.0334 at more than 10% significance level
(Prob. 0.7690). Similarly, 1 unit increase (decrease) in auditor’s knowledge of the sector will insignificantly
decrease (increase) growth by -0.0368 at more than 10% significance level (Prob. 0.7340). Interestingly, an
increase in number of male CEO combined with auditor’s knowledge of the sector increases growth moderately
by 0.1950 at 10% significance level (Prob. 0.0038).
Furthermore, an increase (decrease) in auditor tenure, insignificantly increases growth by 0.0394 respectively at
more than 10% significance level (Prob. 0.7730). CEO gender was reported in table 4.4 above to have a poor
moderating effect on auditor tenure at more than 10% significance level (Prob. 0.9530). In terms of the model
fit, the F- Statistics of 22.27 the model in table 4.4 above fit the data strongly at 1% significance level (Prob.
0.0038). The adjusted R-squared implies that the explanatory variable model in table 4.4. above explained 1.6%
of variance in growth rate, while the remaining variance of 98.4% is unexplained.
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Effects Of Board Size
Finally, the direct impact of board size on growth was investigated in the presence of audit quality and CEO
gender. More specifically, the analysis investigated whether the impact of audit quality, and the direct or
moderating effect of CEO gender varied across the board size of Federal Teaching Hospitals in Nigeria. The
result was reported in table 4.5 below.
Table 4.5: Marginal Effect of Board Size
Dependent Variable: AGR
Variable:
Coef.
Std. err.
t
P>t
AUDT
0.0558
0.1409
0.4000
0.7320
AUDK
-0.0277
0.1112
-0.2500
0.8080
CEOGENDR
-0.0150
0.1177
-0.1300
0.9120
CEOGENDR*AUDK
0.1901
0.1130
1.6800
0.1200
CEOGENDR*AUDT
-0.0101
0.1417
-0.0700
0.9500
BSIZE
0.0068
0.0142
0.4800
0.6400
_cons
-0.0793
0.2617
-0.3000
0.7680
Fit Statistics
F
18.01
Prob > F
0.048
Nag. R
2
0.0172
Adj. R
2
0.0172
Source: Stata Output 2025
The result in table 4.5 above clearly showed that board size does not have a significant effect on growth at more
than 10% significance level (Prob. 0.6400). More importantly, 1 unit increase in board size led to an insignificant
increase of 0.0068 in growth at more than 10% significance level. The moderate impact of CEO gender on the
relationship between auditor’s knowledge of the sector and growth is, however, reduced after controlling for the
effect of board size, while that of auditor’s tenure remain consistent. Thus, suggesting that the relationship
between audit quality as measured by auditor’s knowledge of the sector, and growth vary with board size of
Federal Teaching Hospitals in Nigeria. The F test for joint significance of 18.01 reject the null hypotheses that
the parameter estimates are not significantly different from zero at 5% significance level (Prob. 0.048). The
adjusted R-Squared value of 0.0172, however, implies that the model as it is, explained only 1.72% of the
variance in growth, while the remaining 98.28% was unexplained.
DISCUSSION OF FINDINGS
The objective of this study was to investigate the moderating role of CEO gender on the relationship between
audit quality and growth of Federal Teaching Hospitals in Nigeria. The findings shows that audit quality as
measured by auditor’s knowledge of the sector has a significant positive impact on growth, while the effect of
auditor’s tenure is positive and weak. That the positive effect of audit quality as measured by auditor knowledge
of the sector is slightly moderated by the CEO gender as having a male CEO moderately reverse possible
negative effects of auditor’s knowledge of the sector on growth. That the moderating effect of CEO gender on
audit quality as measured by auditor’s knowledge of the sector appeared to moderately varied across board size
and that board size does not have a significant effect on growth of Federal Teaching Hospitals in Nigeria. The
implication of the findings is that, health institutions should always engage auditors that have the knowledge of
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the sector rather than those that have no knowledge of the sector which in turn enhances audit quality of the
Federal Teaching Hospitals in Nigeria.
CONCLUSION
This research investigates the moderating role of CEO gender on the relationship between audit quality and
growth in the presence of moderating effect of CEO gender and direct effect of board size. The research found
that audit quality as measured by auditor’s knowledge of the sector significantly impacted growth of Federal
Teaching Hospitals in Nigeria positively, while audit tenure has a weak positive effect.
Similarly, it is obvious that audit quality effects on growth as measured by auditor knowledge of the sector was
sensitive to the moderating impact of the CEO gender and board size. Hence, this research concluded that
attention on auditor’s knowledge of the sector when making attempt to enhance audit quality is useful in
enhancing growth of Federal Teaching Hospitals in Nigeria.
RECOMMENDATIONS
In the light of the findings of this research, it is recommended that:
1. Federal Teaching Hospitals in Nigeria should focus more on auditor’s knowledge or specialization in the
public health sector when making decisions on appointment of external auditors.
2. Male CEO should be given preference in the choice of CEOs since this study demonstrated that they are
more likely to enhance the positive impact of auditor’s knowledge of the sector on growth of Federal
Teaching Hospitals in Nigeria.
3. Auditor’s knowledge of the sector should be emphasized more in Federal Teaching Hospitals with larger
board size than those with smaller board size to enhance growth.
Contribution to Knowledge
This research contributed to the existing body of knowledge on the moderating role of CEO gender on the
relationship between audit quality for the success in the public health sector, by exploring how audit quality
impact the growth of government owned institutions in Nigeria with special emphasis on the Federal Teaching
Hospitals in Nigeria. The finding of this research provides a rich means with which to compare audit quality
effect on performance of private enterprises versus government institutions. The study also, contributed to
existing body of knowledge by using available sparse data on Federal Teaching Hospitals in Nigeria.
Research Limitation
This research was limited in a number of ways. Firstly, the sparse available data from Federal Teaching Hospitals
in Nigeria restricted the choice of techniques of data analysis that the researcher could have implemented in this
study to provide rich insights. In addition, the unbalanced nature of the data implies that some diagnostic could
not be carried out. The research, however, overcome the later restriction by employing Maximum Likelihood
Estimate of the model to account for the small samples’ nature of the data and the unequally spaced time period.
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