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

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  • Etibensi, Jackson Edet

    (Department of Accounting Faculty of Management Sciences University of Abuja)

  • Ya'u Mohammed Damagum

    (Department of Accounting Faculty of Management Sciences University of Abuja)

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

Suggested Citation

  • Etibensi, Jackson Edet & Ya'u Mohammed Damagum, 2025. "Audit Quality as a Shield Against Financial Malfeasance: Empirical Evidence on Fraud Prevention and Detection from Nigeria’s Deposit Money Banks," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(8), pages 3840-3853, August.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-8:p:3840-3853
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    References listed on IDEAS

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    1. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5.
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    3. W. Robert Knechel & Ann Vanstraelen & Mikko Zerni, 2015. "Does the Identity of Engagement Partners Matter? An Analysis of Audit Partner Reporting Decisions," Contemporary Accounting Research, John Wiley & Sons, vol. 32(4), pages 1443-1478, December.
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