AUDITORS’ INDEPENDENCE AND FINANCIAL REPORTING QUALITY OF LISTED DEPOSIT MONEY BANK IN NIGERIA

Ezekiel Oyerogba, Rufus I. Akintoye and Abisola Akinola
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Ezekiel Oyerogba: Bowen University, Postal: Iwo, Osun, https://research.icanig.org
Rufus I. Akintoye: Babcock University lishan-Remo, Postal: Ogun State, https://research.icanig.org
Abisola Akinola: Pan-Atlantic University, Postal: Epe Lagos State, https://research.icanig.org

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2022, vol. 11, issue 1, 1-18

Abstract: The ultimate aim of audit is to ensure that all stakeholders have access to reliable and credible financial information, since the audit report adds credibility to financial statements which form the basis for economic and non-economic decisions made by shareholders and other stakeholders. Therefore, this study examined how auditors’ independence determines the financial reporting quality of listed Deposit money banks in Nigeria. The study adopted an ex- post facto research design because secondary data were extracted from published annual reports of 15 listed Deposit Money Banks in Nigeria for a period of 10 years from year 2010 to 2019. The data were analyzed using descriptive statistics and inferentialpanel data analysis. Results from the data analysis showed that there is a significantpositive relationship between Auditors’ tenure and financial reporting quality. The provision of non-audit service had a negative relationship with financial reporting quality. The study also found ainsignificantnegative relationship between audit fees and financial reporting quality. It was also found that there is a positive relationship between audit firm size and financial reporting quality.The study, therefore, concluded that there is a significant relationship between the proxies to uditors’ independence (auditors’ tenure, non-audit services, audit fees, audit firm size) and financial reporting quality of listed deposit money banks in Nigeria.The paper recommends that boards of directors of listed deposit money bansksshould encourage long audit tenure and discourage non-audit services because of the identified positive and negative impactof the two proxies, respectively, on the financial reporting quality of listed Deposit Money Banks in Nigeria.

Keywords: Audit tenure; non-audit services; audit fees; financial reporting quality. (search for similar items in EconPapers)
Date: 2022
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