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
Date Written: April 26, 2017
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: Suggested Citation