Audit Reporting Quality and Client Satisfaction: Evidence from SMEs in Oyo State

Abstract

In today’s competitive business landscape, small and medium sized enterprises (SMEs) play a critical role in driving economic growth, fostering innovation and creating jobs. However, despite their significant contributions, SMEs often face challenges such as limited resources, intense competition and complexities of complying with regulatory requirements. This study investigates the relationship between the quality of audit reporting and client satisfaction among SMEs in Oyo state. The study is guided by agency theory and stakeholder theory. Purposive sampling technique was adopted for this research. The study population consists of 325 registered SMEs in Oyo North senatorial district in Oyo state which consists of 13 LGAs and being the one with the highest number of LGAs among the three senatorial districts in Oyo state. A sample size of 179, approximately 180 respondents was determined using Taro Yamane’s formula. 150 out of the 180 respondents that were intended for the study returned their questionnaires. The ANOVA results indicated significant variation in the variables as follows; Clarity (F=302.0672, p < .000), Communication and Timeliness (F=346.9107, p < .000) at 5% significant level. The findings show that the clarity of audit reports, respondents expressed moderate satisfaction, with an average mean score of 3.38. In terms of communication, respondents generally rated auditors' communication as satisfactory, with highest satisfaction score of 3.40. Timeliness recorded an average mean among the three dimensions, with an average mean score of 3.39. The study concluded that audit reporting quality significantly influences client satisfaction. It is therefore recommended that audit firms should prioritize clear information delivery, effective communication practices, and timely service provision to enhance client experiences and satisfaction.