IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 5 NO. 3 2019

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Audit Independence and Reliability of Financial Reports: Empirical Evidence from Nigerian Banks

OKEZIE STELLA O. (PhD), EGEOLU DANIEL UCHENNA

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Abstract

The study examined the effect of audit independence on reliability of financial reports in the banking sector. Ex-post facto research design was employed and data elicited from four (4) banks listed on the he Nigerian Stock exchange and also operates within the African region. The data spanning across 5years from 2014-2018, were analysed using multivariate linear regression. Findings revealed that audit independence had a significant effect on the value relevance of the financial reports of the banks under study. This was reflected in how the amount spent on audit fee had no significant effect on the reported earnings per share( proxy for reliance on financial reports by investors). Further findings reveal that audit independence has an insignificant effect on the timeliness of the financial reports. It was recommended that banks and other firms alike should negotiate for reasonable audit fees that would ensure engagement of an independent audit firm; in order to enhance the degree of confidence in the reported financial statement and thus create a high level of reliability on the financial reports. Furthermore managers are also enjoined to corporate with auditors in an independent manner to ensure timely production of financial reports which could point to reliability.

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