Audit Quality as a Shield Against Financial Malfeasance: Empirical Evidence on Fraud Prevention and Detection from Nigeria’s Deposit Money Banks

Jackson Edet Etibensi and Ya'u Mohammed Damagum
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Jackson Edet Etibensi: Department of Accounting Faculty of Management Sciences University of Abuja
Ya'u Mohammed Damagum: Department of Accounting Faculty of Management Sciences University of Abuja

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 8, 3840-3853

Abstract: This study provided novel empirical evidence on the comparative effects of two core Audit-quality dimensions—Audit Independence and Audit Competency—on fraud prevention and detection (FPD) in Nigeria’s Deposit Money Banks (DMBs), an under-explored existing-market context. Anchored in Agency Theory and Human Capital Theory, we interrogated the assumption that structural safeguards (Independence) are equally or more effective than professional expertise (Competency) in curbing financial malfeasance. Using an ex-post facto design, we integrate primary survey data from 350 Audit and risk professionals across 20 systemically important DMBs with secondary data (2014–2023). Reliability was high (Cronbach’s α > 0.85); validity was supported via exploratory factor analysis. Hypotheses were tested using bootstrapped regression (5,000 resamples) and covariance-based Structural Equation Modelling (SEM) in AMOS. Findings showed that Audit Competency had a significant positive effect on FPD (β = 0.377, p

Date: 2025
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