MODERATING ROLE OF AUDIT COMMITTEE ON RELATIONSHIP BETWEEN AUDIT FIRM ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED DMBs IN NIGERIA

Halilu Bello Rogo
Volume 2 Issue 2

Abstract

The study analyses the Moderating role of Audit Committee on the relationship between Audit Firm Attributes and Financial Reporting Quality of Listed Deposit Money Banks in Nigeria spanning the period 2010-2021. The study adopted correlation and ex-post facto research design and a census sample of 14 listed deposit money banks on the floor of Nigerian Stock Exchange. Secondary data of the sampled firms was extracted from the annual audited financial reports of the sampled banks. The data was analyzed using the multiple regression model where in both the direct and indirect relationship, the generalized least square (FGLS) result reveals that, audit firm tenure, audit firm compensation, moderating effect of audit committee on audit compensation, audit firm size and audit firm independence are insignificantly influencing the financial reporting quality of listed DMBs in Nigeria. Whereas, audit firm size, audit firm independence, audit committee and moderating effect of audit committee on audit firm tenure revealed a statistical significant relationship on the financial reporting quality of listed DMBs in Nigeria for the period. The study concludes that audit firm attributes has significant effect on the financial reporting quality of listed DMBs in Nigeria. Based on the findings, the study recommended, listed DMBs in Nigeria should reduce the period of rotation of audit firms; banks should stop paying unnecessary high fees to audit firms with the mindset that they will receive high quality financial report; the listed banks should maintain the services of the Big 4 firms as it is shown to be doing more than the smaller firms and auditors should be monitored and there should be adequate regulatory provision to encourage the independence of the audit firms. Keywords: Moderating, Audit, Committee, Deposit Money Bank, Financial Reporting

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