Mountain Top University Library

The effect of audit characteristics on financial reporting quality of deposit money banks was
investigated in this study. This study aims to assess whether the published annual financial
statements of Nigerian banks pass the required quality as to guide users in their decision making.
For the purpose of this study, secondary data was explored, while the sources of the data include
the financial statements (statement of comprehensive income, statement of financial position,
statement of cash flows and non-financial information) of the sampled deposit money banks for
the period 2012 to 2018. This study adopts correlational research design to investigate the
relationships as well as the effects of the audit firm characteristics on the financial reporting quality
of banks in Nigeria. The finding from this study reveals that audit firm size has significant positive
effect on financial reporting quality of banks in Nigeria. Further result from this study indicates
that audit fee has significant effect on financial reporting quality of banks in Nigeria. Another
outcome of this study is that joint audit has no significant effect on financial reporting quality of
banks in Nigeria. Hence, the study concluded that audit firm size, audit fees and joint audit have
significant effects on financial reporting quality of deposit money banks sampled for this study.
The study recommended Shareholders of deposit money banks in Nigeria should ensure that big
size audit firms like the “big four” is the leading auditor of their banks to guarantee higher financial
reporting quality. The study recommends further. The directors of deposit money banks in Nigeria
should maintain the service of their auditor regardless of the magnitude of audit fee to guarantee
higher audit quality that can translate to higher financial reporting quality.