European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Sarbanes-Oxley Act.


Based on the assumption that non-audit fees compromise auditor’s independence and result in lower quality services, the Sarbarnes-Oxley Act of 2002 bans certain non-audit services for audit clients. The link between non-audit services and required auditor’s independence has been heavily debated by accounting scholars. The purpose of this study is to identify the threats to auditors’ independence, and to examine the relationship between auditor’s independence and non-audit services. The lack of clear definition of auditor independence contributes to the resilience of this debate. The Sarbanes-Oxley Act (2002) prescribed a list of non-audit services essentially to help restore investor confidence in the reliability of financial information. A survey design using well-structured questionnaire was used to collect data. Respondents were sampled from five sectors of the Nigerian economy: Banking, Brewery, Chemical & Paints, Conglomerates, and Health. The non-parametric statistical tests used in this study include the Kruskal-Wallis Test and the Mann-Whitney U Tests to draw inferential conclusions regarding the data collected since the data collected from the different categories of respondents. The findings indicate that the provision of non-audit services significantly affects investors’ perceptions of auditor independence, and there is high correlation between auditors’ independence and non-audit services in Nigeria. To maintain public confidence, auditors should continually assess their standing in the community. Any reduction in confidence in the auditing profession will immediately reflect a lack of confidence in audited financial statements, leading to an overall decline of trust in the country’s capital market.

Keywords: Auditor Independence, Non-audit services, Sarbanes-Oxley Act., conglomerates

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