Title: Auditor Independence and Financial Reporting Quality of Listed Deposit Money Banks in Nigeria
Authors: Ike-Nwodo Uche & Odiba Paul Simon,
Volume: 10
Issue: 6
Pages: 92-104
Publication Date: 2026/06/28
Abstract:
This study examines the effect of auditor independence on financial reporting quality of ten listed Deposit Money Banks in Nigeria from 2015 to 2024. Using an ex post facto design and secondary data from audited annual reports, the study employs ordinary least squares regression with total accruals as proxy for financial reporting quality. Auditor independence is measured by audit tenure, audit fees, and audit firm size. Findings reveal that audit tenure has a significant negative relationship with total accruals, indicating that longer auditor engagement enhances reporting quality. Audit fees show a significant positive relationship with accruals, suggesting that higher fees may compromise auditor independence through economic bonding. Audit firm size is negatively but not significantly associated with accruals. The model explains approximately 55% of the variation in financial reporting quality (Adjusted Rē = 0.55; F-statistic p < 0.01). The study recommends that the Financial Reporting Council of Nigeria and the Central Bank of Nigeria enforce reasonable limits on audit tenure, ensure transparent audit fee structures, and strengthen audit committee oversight to enhance auditor independence and financial reporting integrity in the banking sector.