Audit Quality and Value Creation of Listed Deposit Money Banks in Nigeria.

Abstract

The credibility of financial reporting cannot be overemphasised, in order to sustain investor confidence and improve value creation among financial institutions especially banking sector. This study examined the audit quality and value creation of listed Deposit Money Banks (DMBs) in Nigeria. The study assessed whether audit quality influence the market valuation of listed Nigerian banks. An ex-post facto research design was adopted, secondary data were obtained from the audited annual reports and financial statements of ten (10) listed Deposit Money Banks covering the period 2015–2024. Value creation the dependent variable was proxied using Tobin’s Q, while audit quality the independent variable was measured by Audit Firm Size, Audit Fee, Audit Independence, and Audit Tenure. The study utilized descriptive statistics, correlation analysis, Findings revealed that audit quality had a positive insignificant effect on value creation. Audit Firm Size, Audit Independence, Audit Fees, and Audit Tenure showed positive but statistically insignificant relationships with Tobin’s Q. The study concluded that although audit quality improve financial reporting credibility, transparency, and accountability, it does not significantly determine market-based value creation among Nigerian Deposit Money Banks. The study recommends continuous improvement of external audit practices through auditor competence, independence, and effective audit processes to strengthen stakeholder confidence and sustainable institutional development.