Does Audit Quality Reflect Financial Reports of DMBs in Nigeria?

This study examined the effect of audit quality and financial reporting quality of deposit money banks in Nigeria. The objectives of the study were to examine the effect of audit fees and audit tenure on earnings quality of deposit money banks in Nigeria. Secondary data which were sourced from the annual report of the selected deposit money banks from 2014-2023 were used for the study. The population is the 21 listed deposit money banks and purposive sampling technique was adopted to select 10 banks as the sample size. We employed the ex-post facto research design and multiple regression analysis. Data collected was analyzed using EViews 13 in the following order: descriptive statistics, correlation analysis, panel unit root test, estimation of the regression models and then performance of some diagnostics tests. The findings revealed that audit tenure has a negative significant effect of -0.554212 at 1% significance level on earnings quality, audit fees have a positive significant effect of 1.06E-05 at 1% level of significance on earnings quality. The study recommended that management should continue to maintain the present audit fees for as much as the signs are aligned with expectations and management should maintain effective audit firm rotation, increase audit scrutiny, ensure cooling periods in order to mitigate the negative effect of audit tenure on earnings quality.