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Auditor’s Independence and Financial Reporting Quality of Quoted Deposit Money Banks in Nigeria

Author

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  • Abiodun Abolade Moshood

    (Department of Management and Accounting, Obafemi Awolowo University, Ile-Ife)

Abstract

Ensuring credible and high-quality auditing largely depends on the auditor's independence. Whenever auditors grow too close to their clients, their impartiality is compromised, and thereby the integrity of their professional judgment is also in jeopardy. The present research studies the effect of auditor independence on audit quality in sample deposit money banks in Nigeria. The research population included twenty-four (24) listed banks, of which ten (10) were purposively chosen. Data was collected from the annual reports of these banks audited. Descriptive statistics, correlation analysis, and the Ordinary Least Squares (OLS) regression technique were applied. The results reveal that audit fees and audit firm rotation are positively associated with audit quality, while longer audit tenure adversely impacts it. Additionally, audit quality shows a significant negative association with leverage, but a significant positive relationship with firm size. The study recommends strengthening auditor independence by implementing measures such as mandatory rotation of audit firms, limiting auditor tenure, and ensuring fair audit compensation to enhance credibility and transparency in financial reporting.

Suggested Citation

  • Abiodun Abolade Moshood, 2026. "Auditor’s Independence and Financial Reporting Quality of Quoted Deposit Money Banks in Nigeria," International Journal of Research and Innovation in Applied Science, International Journal of Research and Innovation in Applied Science (IJRIAS), vol. 11(3), pages 564-571, March.
    • Handle: RePEc:bjf:journl:v:11:y:2026:i:3:p:564-571
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    References listed on IDEAS

    as
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    2. Rani Hoitash & Ariel Markelevich & Charles A. Barragato, 2007. "Auditor fees and audit quality," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 22(8), pages 761-786, September.
    3. repec:eme:maj000:02686900710819634 is not listed on IDEAS
    4. Rani Hoitash & Ariel Markelevich & Charles A. Barragato, 2007. "Auditor fees and audit quality," Managerial Auditing Journal, Emerald Group Publishing, vol. 22(8), pages 761-786, September.
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