IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 2 2025
DOI: 10.56201/ijbfr.vol.11.no2.2025.pg1.12

---

Assessing Audit Effectiveness in Nigerian Deposit Money Banks: The Moderating Role of Audit Quality on Fiscal Performance

Ahmed Rufai, Yusuf Yakubu

---

Abstract

The study looked at how organizational control influenced the determinants of audits effectiveness in Nigerian registered reserve cash institutions, as well as the effect of audits qualities on fiscal performances. The ex post facto study approach was used in this investigation. All 13 LDMBs listed on the Nigerian Stock Exchange as of December 31, 2024, make up the study's sample size. Since the entire population was studied, a sampling method was not required. Data were derived from secondary sources. The logit regression approach was employed for data analysis. The study's findings demonstrated a clear association between audit tenure and audit independence. Nigerian listed deposit money banks' financial performance has been significantly impacted by the proxies of the independent variable. Based on the results, this analysis indicates that the A unit increase in audit tenure corresponds to a 0.025 decline in the natural log of financial performance. However the study makes recommendations on how the Nigerian Deposit Money Banks (DMBs) may take long-term institutional ownership into account. This is because long-term institutional shareholders are more inclined to keep an eye on management and, as a result, demand higher audit quality from Big Four audit firms.

keywords:

Audit Quality, Institutional Ownership, Financial Performance, Nigerian Deposit

---

References:

Achyarsyah, P., & Molina. (2014). Audit firm tenure, audit firm size and audit quality. Global
Journal of Business and Social Science Review,
2(4), 69-76
Adeniji, Y. A. (2021). Perception of auditors working environment and audit quality in Nigeria.
European Journal of Accounting Auditing and Finance Research, 9(2), 1-26.
Adeniyi, I., &Mieseigha, E. (2013). Audit tenure: An assessment of its effects on audit quality.
International Journal of Academic Research in Accounting, Finance and Management
Sciences, 3(3), 275 - 283.
Afesha, T. (2015). Audit fee determinants and audit quality in Ethiopian commercial banks. EBJE,
5(2), 159-186.
Alhadrami, A., Rafiki, A., &Sarea, A. (2020). The impact of an audit committee’s independence
and competence on investment decision: A study in Bahrain. Asian Journal of Accounting
Research, 5(2), 299-313. https://doi.org/10.1108/AJAR-02-2020-
0008
Aliu, M., Okapanachi, J., & Mohammed, N. (2018). Auditors independence and audit quality:
An empirical studuy. International Accounting and Taxation Review, 2(2), 15 - 27.
Amahalu, N., & Beatrice, E. (2017). 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, 7(2), 169-179.
Ashrafi, M., Mohammadnezhad, S., &Ghanbari, R. (2017). The relationship between institutional
ownership and financial leverage with audit quality in companies listed on Tehran stock
exchange. Speciality Journal of Accounting and Economics, 2(3), 96-108.
Ayorinde, B., Osasrere, O., & Emmanuel, U. (2019). Auditor's independence and audit quality: A
study of selected deposit money banks in Nigeria. International Journal of Finance and
Accounting, 5(1), 13 - 21.
Azizkhani, M., Daghani, R., & Shailer, G. (2018). Audit firm tenure and audit quality in a
constrained
market.
The
International Journal of Accounting, 53(3), 167 -
Bako, M. (2018). The impact of corporate governance on the quality of financial reporting in the
Nigerian Chemical and Paint industry. Research Journal of Finance and
Accounting, 9(7), 42-59
Baron, R.M., & Kenny, D.A. (1986). The moderatormediator variable distinction in social
psychological research: Conceptual, strategic, and statistical considerations. Journal of
Personality & Social Psychology, 6(51), 1173-1182.
Blandon-Garcia, J., Argiles, J., &Ravenda, D. (2019). On the relationship between audit tenure
and fees paid to the audit firm and audit quality. Journal of Accounting in Europe, 17(1).
78-103
CBN. (2020, 5 8). All financial institutions. Retrieved from Central Bank of Nigeria:
www.cbn.gov.ng/Supervision/AllFinInstitut ions.asp
Chen, T., Dong, H., & Lin, C. (2017). Institutional ownership and audit quality: evidence from
Russell index reconstitutions. Available at SSRN 2849685.
Enofee, A., Mgbame, C., Aderin, A., &Ehi-Oshio, O. (2013). Determinants of audit quality in the
Nigerian
business
environment. Research
Journal
of
Finance
and Accounting, 4(4), 36-43.
Haque, T., Afroze, S., &Tuz-Zohra, F. (2019). Impact of corporate governance on audit fees and
audit quality: A study in the insurance industry of Bangledesh. The Cost and Management,
47(2), 4 - 11.
Hardiningsih, P., Januarti, I., Oktaviani, R., Srimindarti, C., &Udin, U. (2019). Determinants of
audit quality: An empirical insight from Indonesia. International Journal of Sicentific and
Technology Research, 8(7), 570-578.
Ibn, S., &Bala, H. (2015). Ownership structure and audit quality of Nigerian deposit money banks.
Journal of Social and Management Science, 2(3). 54-65
Jerubet, S., Chepng’eno, W., &Tenai, J. (2017). Effects of audit committee characteristics on
quality of financial reporting among firms listed in Nairobi securities exchange, Kenya.
International Journal
of
Economics, Commerce and Management, 2(1). 553-
569
Kaawaase, T. K., Nairuba, C., Akankunda, B., &Bananuka, J. (2021).Corporate governance,
internal audit quality and financial reporting quality of financial institutions. Asian Journal
of Accounting Research,.ahead-ofprint, no. ahead-of-print.
Kouaib, A., &Jarboui, A. (2014). External audit quality and ownership structure: Interaction and
impact on earnings management of industrial and commercial Tunisian sectors. Journal
of
Economics
Finance
and Administrative Science, 19(37), 78-89.
Majiyebo, O., Okpanachi, J., Nyor, T., Yahaya, O., & Mohammed, A. (2018). Audit commitee
independence, size and financial reporting quality of listed deposit money banks in Nigeria.
Journal
of
Business
and Management, 20(2), 40 - 47.
Ndubisi, A., &Ezechukwu, B. (2017). 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, 7(2), 117 - 130.
Ndubuisi, A., Okeke, M., &Chinyere, O. (2017). Audit quality determinants: Evidence from
quoted health care firms in Nigeria. International Journal of Academic Research in
Accounting, Finance and Management Sciences, 7(4), 216-231.
Nikbakth, M., &Khanbeigi, M. (2018). The impact of
corporate
governance
on
financial reporting quality: Integrated approach .Journal of Accounting and Auditing
Review, 25(3), 433 - 455.
Ogoun, S., Peralayefa, O. G. (2020). Corporate governance and audit quality in Nigeria. American
Journal of Industrial and Business
Management,
10(2),
250
- 261. https:/doi.org/10.4236/ajibm.2020.102016
Ohaka, J., &Imaerele, T. (2018). Audit committee independence and corporate financial reporting
quality in aluminum corrugating companies in Rivers state. International Journal of
Economics and financial Management, 3(1). 44-56
Oladipupo, A., &Monye-Emina, H. (2016). Do abnormal audit fees matter in Nigerian audit
market? International Journal of Business and Finance Management Research, 4, 64 - 73.
Omotosho, S. M., Okpanachi, J., &Dikki, A. (2017). Effect of audit committee independence on
audit quality of listed consumer goods companies in Nigeria. International Journal
for Innovation Education and Research, 5(11), 47-62
Pritama, Y., Supriana, T., &Torong, Z. (2017). The factors of the influence on audit quality at the
inspectorate general
of
ministry
of environment and foresty. Advances
in Economics, Business
and
Management Research, 46, 249 - 252.
Qawqzeh, H., Endut, W., Rashid, N., Johari, R., Hamid, N., &Rasit, Z. (2018). Auditor tenure,
audit firm rotation and audit quality: A literature review .International Journal of
Academic Research in Business and Social Sciences, 8(12), 1314 - 1324.
Rad, S., Salehi, H., & Pour, H. (2016). A study of the interaction of audit quality and ownership
structure on earnings management of listed firms on Tehran Stock Exchange. International
Journal of Humanities and Cultural studies, 2.
Sunday, O. (2019). Auditors independence and quality of financial reporting in listed Nigerian
manufacturing
companies. International Journal of Accounting and Finance, 8(1),
111 - 128.
Tahir, S., Saleem, M., & Arshad, H. (2015). Institutional ownership and corporate value:
Evidence from Karachi stock exchange (KSE) 30-Index pakistan. Journal of
Research, 7(1), 41 - 49.
Vivandari, A., &Fitriany, F. (2018). Impact of ultimate ownership type on audit fees with
corporate governance as moderating variable. Advance in Social Science, Education and
Humanitarian Research, 348(1), 244-250
Yekini, K., Adelopo, I., Andrikopoulos, P., &Yekini, S. (2015). Impact of board independence
on the quality of community disclosures in annual reports. Accounitng Forum, 39(4), 249
- 267.
Yunidar, A., &Firmansyah, A. (2020). Financial Derivatives, Financial Leverage, Intangible
Assets

DOWNLOAD PDF

---

Back