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

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.

Independence ,Financial ,Banks

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