Gusau Journal of Accounting and Finance (Oct 2020)
DO FINANCIAL AUDITORS’ INDEPENDENCE INFLUENCE THE PORTFOLIO PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA?
Abstract
The study examines the impact of financial auditors’ independence on the portfolio performance of Deposit Money Banks (DMBs) in Nigeria. The study uses financial audit fees, financial auditor’s rotation and financial auditor’s tenure as measures of financial auditors’ independence while Return on Assets (ROA) was used as a measure of performance of Deposit Money Banks (DMBs) in Nigeria. The population of the study comprises all the listed Deposit Money Banks (DMBs) in Nigeria. Using a purposive sampling technique, ten (10) Deposit Money Banks (DMBs) eventually became the sampled size. Secondary Data was used and data were sourced from the audited annual financial statement of the sampled banks. Using descriptive statistics, correlation coefficient and the Ordinary Least Square (OLS) regression, the study revealed that there is a positive and not significant relationship or impact between financial audit fees, financial audit firm tenure on deposit money banks performance. It was found that there was no significant and negative impact or relationship between financial audit firm rotations on deposit money banks performance. Resulting from the above findings, the study concludes and recommends that financial auditors’ independence should be encouraged by taking different and drastic measures which includes, but not limited to; adequate financial audit fees, regular rotation of financial auditors and reduction in the tenure of auditors in order to address the various issues militating against financial auditors’ independence and the portfolio performance of deposit money banks in Nigeria.
