Audit Independence and Financial Statements Quality in Nigeria Listed Banks

Abstract

The primary aim of this study was to examine the impact of audit independence on the financial statement quality of commercial banks listed in Nigeria. The study was conducted using a twelve-year scope (2010 to 2021). Four independent variables—audit fee, joint audit, audit tenure, and audit opinion—as proxies for measuring audit independence were employed while twelve (12) commercial banks that consistently submitted their annual financial reports throughout the entire period of investigation were used as the sample size. This study conducted pre-regression analyses, including descriptive statistics, correlation analysis, and data normality analysis. The regression result revealed a significant influence of audit fees on financial statement quality while auditor tenure, joint audit and auditors’ opinion showed no statistically significant influence on the financial statement quality of the sampled banks. In line with the outcome, the study recommends strengthening the oversight and regulation of auditing practices in the Nigerian banking sector. This could involve closer collaboration between regulatory authorities and audit firms to ensure that audit fees are commensurate with the quality of audits conducted.