EXTERNAL AUDIT QUALITY AND FINANCIAL PERFORMANCE OF LISTED COMMERCIAL BANKS IN NIGERIA

Abstract

This study investigated the relationship between external audit quality and the financial performance of listed commercial banks in Nigeria. Despite the presence of regulatory institutions and mandatory audit requirements, the Nigerian banking sector continues to face persistent challenges, including financial misstatements, fraud, and institutional failures. These concerns raise critical questions about the effectiveness of audit practices in the sector. The study aims to evaluate how core components of audit quality—such as auditor independence, audit firm size and reputation, audit tenure, and audit frequency—impact the financial performance of banks. Employing a descriptive and empirical approach, the research gathers and analyses data from selected listed commercial banks using both secondary data and statistical tools. The findings provided evidence that high-quality audits contribute meaningfully to financial stability, improved performance metrics, and stronger corporate governance within the Nigerian financial system. By focusing on a sector central to economic development, the study offers valuable insights for regulators, auditors, policymakers, and financial institutions on the importance of audit integrity. It contributes to the broader discourse on enhancing audit frameworks in emerging economies, particularly in contexts where enforcement mechanisms may be weak and audit independence is often compromised.