EFFECT OF CORPORATE BOARDS ON THE AUDIT QUALITY OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The consolidation of the banking industry in Nigeria necessitated the issue of a code of corporate governance for banks post consolidation effective, April 2006. In order to address weaknesses and improve the mechanisms for enforcing its code of corporate governance issued in 2003, the SEC of Nigeria issued a revised code applicable to all public companies effective April 2011. The data for the study were sourced from the twelve (12) selected Deposit money Banks in Nigeria using multiple regression analysis to examine effects of corporate governance on audit quality of deposit money banks in Nigeria. The random effect regression result of the study shows that corporate governance attributes had significant effect on the quality of audit of Deposit money Banks in Nigeria, it also shows that board independence and board audit committee independence had significant effect on audit quality, while board size had no significant effect on audit quality. Arising from the findings, the study recommended that the board should be composed of competent and -independent board members that can use their expertise to improve audit reporting process of Deposit money Banks in Nigeria. Also, that the board audit committee membership should be encouraged to be proactive in carrying out its duties in a diligent manner. Furthermore, the study recommends that board size should not be increased beyond the regulatory specification so as to make them more effective and efficient.