Governance Structures and Audit Quality of Banks in Nigeria

Ekwere R. Enang, Etim O.Etim, Sunday U. Ekpo & Nse E. Akpan

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Abstract

This study was carried out to examine the influence of governance structures on the audit quality of banks in Nigeria from 2005 to 2020. The research design adopted was ex-post facto. The purposive sampling technique was used to select 11 banks out of the 14 deposit money banks listed on the Nigerian Stock Exchange as at December, 2020. Data obtained from the annual reports of the selected banks were analyzed using multiple regression. Findings showed that board independence, audit committee size and audit committee meetings have a positive relationship with audit quality of banks in Nigeria, while board of directors' size and board of directors' meetings have a negative relationship with audit quality of banks in Nigeria. The study concluded that governance structures influence the audit quality of banks in Nigeria. Following the finding that the size of the board of directors does not positively influence the audit quality of the banks, the study recommended that expertise and competence should be prioritized in constituting the board and not just the size; that governance codes should specify the qualification of a would-be board member; and that the existing corporate governance codes for banks be amended to accommodate more meetings for the audit committee, leading to more effective monitoring and supervision of all banking activities.

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