Evaluation of Audit Report Quality Determinants and Financial Reporting in Listed Deposit Money Banks in Nigeria

The financial reporting quality of deposit money banks is pivotal for transparency and accuracy. This study investigates the impact of audit report quality on financial reporting outcomes, particularly for listed Deposit money banks in Nigeria. The influence of auditor industry specialization, audit committee composition, and auditor tenure on financial reporting quality is examined. Data spanning 2010 to 2022 from annual reports of listed Nigerian deposit money banks was analyzed using proxies like auditor industry¬ specialization, audit committee composition, and auditor tenure. Financial reporting quality is assessed through the Jones Discretionary Accrual method, supplemented by variables like cash flow from operations. Employing correlation analysis, pooled OLS regression, hierarchical regression, and the Hausman Specification test, the study revealed intriguing insights into the audit report quality and financial reporting nexus for listed deposit money banks in Nigeria. While auditor industry specialization insignificantly affects reporting quality, a notable negative influence was revealed by audit committee composition, suggesting a correlation between higher committee member numbers and improved reporting. Additionally, longer auditor engagement is significantly linked to enhanced reporting quality. The study underscores the complex interplay between audit report quality and financial reporting in Nigerian deposit money banks. To promote transparent financial reporting, organizations are recommended to strengthen audit committee structures and extend auditor tenures.