AUDIT QUALITY AND FINANCIAL REPORTING QUALITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
The reliability of financial information is central to the stability, transparency and accountability of the banking sector. In Nigeria, deposit money banks hold a critical position in economic development, so the quality of their financial reports matters greatly to investors, regulators, depositors and other stakeholders. This study examines the relationship between audit quality and financial reporting quality among listed deposit money banks in Nigeria. It is motivated by ongoing concerns about corporate failures, earnings manipulation and the extent to which external audits genuinely strengthen the credibility of financial statements. Building on agency theory, the study argues that high quality audits reduce information asymmetry between managers and stakeholders by improving monitoring and limiting opportunistic reporting. The study adopts an ex post facto research design using secondary data drawn from the annual reports and accounts of listed deposit money banks in Nigeria over the review period. Audit quality is proxied by auditor independence, audit firm size, audit tenure and audit fees, while financial reporting quality is measured through earnings management (discretionary accruals) and reporting reliability. The paper contributes to the literature by assessing how audit effectiveness shapes the credibility of financial disclosures in Nigeria's banking environment and offers implications for regulators, banks, auditors and investors.
Keywords: Audit Quality, Financial Reporting Quality, Deposit Money Banks, Auditor Independence, Earnings Management, Nigeria