AUDIT QUALITY AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS’ FINANCIAL REPORT IN NIGERIA.
Keywords:Audit quality, Audit fee, Audit firm size, Audit tenure, Financial performance, Earnings per share.
The study focused on the audit quality and financial performance of deposit money banks’ financial report in Nigeria. Audit fee, audit firm size and audit tenure were used as independent variables while earnings per share was used to measure performance. To achieve the objectives of the study, ex-post facto research design was adopted. The source of data collection is secondary data. Data were generated from annual reports and accounts of the selected banks. The data collected were analyzed using multiple regression analysis. The finding revealed that (i) There is a positive relationship between audit fee and earnings per share of deposit money banks financial report in Nigeria (ii) There is a positive relationship between audit firm size and earnings per share of deposit money banks financial report in Nigeria (iii) There is a negative relationship between audit tenure and earnings per share of deposit money banks financial report in Nigeria. Based on the findings, the study recommends that deposit money banks should endevour to balance the costs of audit by paying prudent fee for audit services such that it will not impede or influence the external auditors judgement on the reported financial figures in order to minimize the risk of reduced independence. Such practices if not considered that lead to audit risk of poor judgement that might distort the value relevance of financial reports of the banks thus; lead to a situation where investors base there judgement on reported earnings figures that are inappropriate.