Artificial Intelligence, External Audit Quality and Financial Accountability of Deposit Money Banks in Lagos, Nigeria

Adeeko; Tosin Olayemi1; Adedipe Oluwaseyi Ayodele Ph.D

doi:10.56201/jafm.vol.12.no7.2026.p326.333

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Artificial Intelligence, External Audit Quality and Financial Accountability of Deposit Money Banks in Lagos, Nigeria

Adeeko, Tosin Olayemi1, Adedipe Oluwaseyi Ayodele Ph.D

Abstract

This study investigated the impact of artificial intelligence (AI), external audit quality on financial accountability of Deposit Money Banks in Lagos State, Nigeria. More specifically, this study examined the elements of the level of AI, effectiveness of AI in fraud detection, reliability and accuracy of the audit, as well as timeliness and efficiency of the audit, and the impact of these elements on financial accountability. Guided by Agency Theory, the study employed a survey research design. External auditors and audit specialists working in the four largest international audit firms (PwC, KPMG, EY and Deloitte) in Lagos were surveyed, and 912 usable responses were collected. Data were analyzed using descriptive statistics, reliability analysis using Cronbach’s alpha, and simple and multiple regression analyses. The outcomes of the study revealed that the four model’s independent variables had a positive and significant influence on financial accountability with a confidence level of 95%. The level of AI adoption (β = 0.591, R2 = 0.541), effectiveness of AI in fraud detection (β = 0.624, R2 = 0.573), reliability and accuracy of the audit (β = 0.573, R2 = 0.502), and timeliness and efficiency of the audit (β = 0.558, R2 = 0.487). The combined model was significantly high (R2 = 0.714, F = 558.46, p < 0.05) and accounted for 71.4% of the variance in financial accountability in which the effectiveness of AI in fraud detection was the strongest of the four variables. The study found that the use of AI in external auditing strengthened financial accountability in Nigerian Deposit Money Banks . It suggested the banks should allocate more resources toward the development of AI-based fraud detection systems and real-time auditing. It is recommended that the Central Bank of Nigeria establishes a policy framework that balances the need to enhance the accountability of banks and the development of responsible AI in auditing.

Keywords

Artificial IntelligenceAudit QualityFinancial AccountabilityDeposit Money Banks

References

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Artificial Intelligence, External Audit Quality and Financial Accountability of Deposit Money Banks in Lagos, Nigeria

Abstract

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