E ISSN: 2583-049X
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International Journal of Advanced Multidisciplinary Research and Studies

Volume 3, Issue 2, 2023

Auditor Characteristics and Audit Report Quality of Listed Deposit Money Banks (DMBs)



Author(s): Daniel Izuchukwu Chude, Nkiru Patricia Chude

Abstract:

The broad objective of the study is to examine the relationship between auditor characteristics and audit report quality of Deposit Money Banks (DMBs) in Nigeria. The study specifically examined the effect of auditor independence and audit team competency on the quality of audit reports issued by an audit firm. The study adopted a survey research design and the final sample comprised 367 respondents drawn from DMBs in the Awka metropolis and registered members of ICAN and ANAN. The primary data were checked for reliability using the Cronbach Alpha (.781, .771, and .732) and the hypotheses were tested using a simple linear regression technique. The study revealed auditors’ independence has a positive effect on the quality of audit reports issued by auditors. There is a significant relationship between audit team competency and the quality of audit reports issued by the audit firm. Based on this the study recommends that there should be a re-definition of the auditors’ role from that of a watchdog to a professional expert. By training, auditors should have an enquiry attitude not suspicious of anybody, but suspecting that there may have been an error honest or fraudulent. Reputable firms should be hired to audit the accounts of the banks. Also, the institute of chartered accountants of Nigeria (ICAN) should promptly investigate all accountants and auditors of collapsed banks and discipline erring members and any accountants/auditors found guilty of professional negligence or complicity in auditing of the accounts should be black-listed in addition to other penalties. To be truly independent, auditors’ appointment and remuneration should be fixed by an audit committee made up of equal members of directors and shareholders and not by management acting on behalf of the shareholder.


Keywords: Auditor Independence, Audit Team Competency, Audit Quality, Auditor Characteristics

Pages: 1125-1133

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