HENRY O. Wobo Ph.D
Department of Accounting
University of Port Harcourt, Rivers State, Nigeria
Email: henry.wobo@uniport.edu.ng
NDUBUISI Odoemelam Ph.D
Department of Accounting
University of Port Harcourt, Rivers State, Nigeria
Email: ndubuisi.odoemelam@uniport.edu.ng
JEPHTHAH R. Panguru
Department of Accounting
University of Port Harcourt, Rivers State, Nigeria
Corresponding email: ndubuisi.odoemelam@uniport.edu.ng
Abstract
This study investigates the relationship between audit quality and the financial reporting quality
(FRQ) of quoted deposit money banks in Nigerian Exchange Limited (NGX) from 2016 to 2023.
Using a panel data approach and Fixed Effect Model of Regression, the study examines the
relationship between three dimensions of audit quality—audit fees, audit firm size, and audit
independence and the relevance of financial reports. The findings reveal a positive but statistically
insignificant relationship between audit fees and FRQ, indicating that higher audit fees may reflect
greater audit effort and improved audit quality. However, the relationships between audit firm size,
audit independence, and FRQ were found to be negative and statistically insignificant, challenging the
conventional belief that larger audit firms and greater auditor independence automatically lead to
higher FRQ. The study concludes that the impact of audit quality on FRQ may be context-dependent,
varying by industry or region. The study recommends tailored audit approaches that consider the
specific characteristics of the Nigerian banking sector and calls for further research into the evolving
dynamics of audit quality and financial reporting.
Keywords: Audit quality, financial reporting quality, relevance, money deposit bank and
restructuring.