Determinants of Audit Quality: Evidence from Deposit Money Banks Listed on Nigeria Stock Exchange

International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 7, No. 2, April 2017

14 Pages Posted: 26 Jul 2017 Last revised: 10 Sep 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Ezechukwu Beatrice

Federal Polytechnic, Oko

Date Written: April 26, 2017

Abstract

The objective of this study is to ascertain the determinants of audit quality with a focus on selected Deposit Money Banks listed on the floor of Nigeria Stock Exchange from 2010-2015. This study made use of secondary data obtained from fact books, annual reports and account of selected banks under study. The relevant data were subjected to statistical analysis using Pearson coefficient of correlation, Ordinary Least Square (OLS) and Granger causality test with the aid of E-view 9.0. The result of this study revealed that there is a positive and statistically significant relationship between audit fees, audit tenure, audit firm size and audit quality. It was also empirically verified that audit fees, audit tenure, audit firm size have a statistically significant relationship with audit quality of banks listed on the floor of Nigerian Stock Exchange at 5% level of significance. The study recommends among others that auditor-client relationship should not exceed 3 years, because the auditor may develop close relationship with the client and become more likely to act in favour of management, resulting in reduced objectivity and audit quality.

Keywords: Audit quality, audit fees, audit tenure, audit firm size

JEL Classification: L15, M15, M53

Suggested Citation

Amahalu, Nestor and Beatrice, Ezechukwu, Determinants of Audit Quality: Evidence from Deposit Money Banks Listed on Nigeria Stock Exchange (April 26, 2017). International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 7, No. 2, April 2017. Available at SSRN: https://ssrn.com/abstract=3008357

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Ezechukwu Beatrice

Federal Polytechnic, Oko ( email )

PMB 021 Aguata
Anambra +234
Nigeria
08033887708 (Phone)

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