INFLUENCE OF AI-DRIVEN AUDIT PRACTICES ON FINANCIAL PERFORMANCE OF LISTED AGRO-ALLIED COMPANIES IN NIGERIA

Abstract

This study investigates how integrating Artificial Intelligence (AI) into corporate internal control frameworks affects the financial performance of listed agro-allied manufacturing companies in Nigeria. These firms are particularly vulnerable to financial leakages, such as inventory diversion and invoice fraud, because they operate across decentralized and logistically exposed supply chains stretching from rural farms to urban processing plants. Utilizing a concurrent triangulation mixed-methods research design, this paper combines primary survey data from 132 accounting and IT audit professionals with an eight-year panel dataset (2018–2025) derived from the audited reports of the three major listed agro-allied enterprises on the Nigerian Exchange: Okomu Oil Palm Company Plc, Presco Plc, and FTN Cocoa Processors Plc. The study operationalizes AI audit practices using three core metrics—Audit Automation Intensity (AAI), Audit Data Analytics Capability (ADAC), and Continuous Audit Implementation (CAI)—and measures their impact against Earnings per Share (EPS), Tobin’s Q (TBQ), and Asset Turnover Ratio (ATR) using Ordinary Least Squares (OLS) panel regression. The empirical findings show that Audit Automation Intensity significantly enhances EPS (β= 0.142, p < 0.05) by protecting equity funds from administrative misstatements. Audit Data Analytics Capability shows a strong positive effect on TBQ (β = 0.524, p < 0.01) by introducing continuous transactional verifications that prevent warehouse leakages and improve market valuation. Concurrently, enterprise-wide Continuous Audit Implementation unifies operational visibility and expands ATR (β= 0.231, p < 0.01) by cutting out administrative waste and duplicate billing. Ultimately, transitioning to algorithmic AI compliance shifts internal controls from reactive post-mortems into proactive asset protection mechanisms. The study recommends that regulatory bodies modernize local corporate governance codes to actively incentivize digital transitions across the manufacturing sector.