Audit Quality on Earnings Management in Nigeria Deposit Banks

Student: Regina Godwin (Project, 2025)
Department of Accountancy
Auchi Polytechnic, Auchi, Edo State

Abstract

The study examines the effect of audit quality and earnings management in Nigerian
deposit money banks. The research design adopted for this study is the correlational
research design. The study employed purposive sampling to select a sample size of 35
banks. The findings reveal the following: audit independence has a significant
negative effect on earnings management; audit rotation has a significant positive
effect on earnings management; audit firm size has a significant effect on earnings
management; and auditor tenure negatively affects earnings management. The study
concludes that audit quality, when properly enforced, can serve as an effective tool to
curtail earnings management and improve the reliability of financial reporting in the
Nigerian banking sector. The study recommends that: management of deposit money
banks should ensure auditors maintain full independence and are not subjected to
undue influence; regulatory bodies should enforce policies on audit firm rotation to prevent familiarity threats.

Keywords
audit quality earnings management nigeria deposit banks
Filters
Institutions