AUDITORS INDEPENDENCE AND FINANCIAL REPORTING QUALITY

This study examined the influence of audit characteristics on the financial reporting quality ofdeposit money banks listed on the Nigerian Exchange. The main objective was to assess theeffects of audit firm tenure, audit firm size, and non-audit services on the credibility andransparency of financial reports. The study adopted an ex-post facto research design and utilizedecondary data collected from annual reports of twelve listed banks covering the period 2016 to2023. The data were analysed using panel regression analysis with robust standard errors toaccount for heteroskedasticity. The study finds that audit firm tenure has no significant impact on financial reporting quality, ndicating that the duration of auditor-client relationships does not independently determineeporting outcomes in the Nigerian banking sector. However, audit firm size showed aignificant positive relationship with financial reporting quality, suggesting that larger auditfirms contribute to higher transparency and reliability due to their extensive expertise andtronger regulatory oversight. Additionally, non-audit services exhibited a significant positiveeffect on financial reporting quality, implying that when properly managed, these services canenhance auditors’ operational understanding and improve audit effectiveness rather thancompromise independence. The study concludes that audit firm size and non-audit services are critical determinants offinancial reporting quality among Nigerian deposit money banks, while audit firm tenure plays aimited role. The study recommends that regulators encourage the use of reputable large auditfirms and implement guidelines to manage non-audit services effectively to strengthen overallaudit quality and financial transparency in the sector