Audit Quality And Performance Of Banks In Nigeria: 2012 - 2019
Mudathir Akanni Babatunde
Department of Accountancy, Osun State Polytechnic, Iree, Nigeria
Lateef Olabisi Adedeji
Department of Banking and Finance, Osun State Polytechnic, Iree, Nigeria
Ismaila Olawale Adegbite
Department of Statistics, Osun State Polytechnic Iree, Nigeria
Keywords: Audit Quality, Financial Performance, Market performance, Listed banks, AUDIT QUALITY AND PERFORMANCE OF BANKS, Audit Committee Independence
Abstract
Audit quality has been reported to support the efficient functioning of capital markets since it instills confidence of stakeholders in the credibility and integrity of corporate financial reports. Therefore, this study attempts to examining the impact of audit quality on the performance of Deposit Money Banks (DMBs) in Nigeria using both accounting and market measures of assessing performance. We employed 9 sampled banks out of 16 listed on Nigerian Stock Exchange (NSE) market for a period of eight financial years between 2012 and 2019 based on panel data approach. Furthermore, data were sourced from the annual reports and financial statements of the sampled banks. This study employs correlation multiple regression techniques to analyse the observed variables in the model. The results revealed that both audit fee and auditor size show a positive and significant relationship with accounting measure of bank’s performance (ROA). Conversely, the audit fees and size have positive but not significant effect on market measure of performance, Tobin’s Q. The study therefore, recommends that the executives should engage the services provided by audit firms whose integrity and character is unquestionable in order to improve the performance of deposit money banks in Nigeria.