AUDIT QUALITY AND EARNINGS MANAGEMENT OF LISTED INTERNATIONAL LICENSED COMMERCIAL BANKS IN NIGERIA

Abstract

The study examined audit quality and earnings management of listed international licensed commercial banks in Nigeria. The specific objectives were to; determine the effect of audit tenure on discretionary accruals of listed commercial banks in Nigeria, ascertain the effect of audit fee on discretionary accruals of listed commercial banks in Nigeria, examine the effect of audit tenure on conservatism of listed commercial banks in Nigeria, evaluate the effect of Audit fee on conservatism of listed commercial banks in Nigeria. This study adopted ex-post facto research design. The population and sample size of the study is the eight (8) listed commercial banks with international license in Nigeria stock exchange as at December 31^st 2021. Secondary data was used as instrument. The formulated research questions were analyzed with descriptive statistics. The hypotheses were tested using the multiple regression analysis with the aid of E-view version 10. The study concludes that, there is no significant relationship between audit tenure and discretionary accruals of listed international licensed commercial banks in Nigeria. There is significant between audit fee and discretionary accruals of listed international licensed commercial banks in Nigeria. Hence, there is no significant relationship between audit tenure and conservatisms of listed international licensed commercial banks in Nigeria. There is no significant between audit fee and conservatisms of listed international licensed commercial banks in Nigeria. The study recommend that policy should be enacted on the banking industry, concerning too long audit tenure, and recommend that there should be change of audit firm within five to seven years in order not to have audit misstatements as a result of close working relationship. This in turn will reduce discretionary accruals and earnings smoothing. Listed international licensed commercial banks should continue with appropriate audit fee in order for better earnings quality in listed construction companies in Nigeria. The commercial banks sector should monitor the compliance with the provisions of the Nigerian code of corporate governance earnings management of conservatism. This will help strengthen the faithful representation of financial reports quality. To make reliable audit and financial reporting quality by management, commercial banks should maintain the level of audit fee to enhance the quality of financial reports in conservatism.