MACAULAY, PROSPER IMOOHI

This study examines the relationship between auditor independence and corporate fraud across 8 Publicly listed companies spanning multiple sectors in Nigeria. The research investigates five key determinants of auditor independence; audit tenure, non-audit services, audit firm rotation, audit firm size, and audit fee dependence, and their impact on fraud detection. A quantitative research design was employed, utilizing secondary data from financial statements, audit reports, and corporate filings from 2018 to 2023. Descriptive and inferential statistical analyses were conducted to assess how each factor influences corporate fraud risk. The findings indicate that prolonged audit tenure can either enhance fraud detection by improving auditors’ understanding of clients or impair independence due to familiarity threats. The provision of non-audit services was found to significantly increase fraud risk, as financial dependence on additional consulting engagements compromises auditors' objectivity. Mandatory audit firm rotation was associated with reduced fraud risks by introducing fresh perspectives and minimizing complacency, although frequent rotations posed transitional challenges. The study also found that audit firm size had an inconclusive effect on fraud detection, with Big Four firms benefiting from greater regulatory scrutiny but still susceptible to financial incentives. Furthermore, audit fee dependence was strongly linked to increased fraud risks, as auditors reliant on a single client’s fees were less likely to issue adverse opinions. The study concludes that strengthening auditor independence through stricter regulatory enforcement, mandatory firm rotation, and limitations on non-audit services is essential for mitigating corporate fraud. The findings provide practical insights for policymakers, auditors, and corporate governance bodies to enhance financial reporting integrity and fraud prevention mechanisms in Nigeria