The Impact of External Audit Quality on Financial Reporting Accuracy in Nigerian Banks: A Case Study of Access Bank Plc
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Background of the Study
External audits play a crucial role in maintaining the credibility and reliability of financial statements by ensuring that reported figures reflect the true financial position of an organization. In the Nigerian banking sector, where financial integrity is paramount, external audit quality significantly impacts financial reporting accuracy. Banks like Access Bank Plc must meet regulatory requirements and ensure stakeholder trust through accurate financial disclosures.
The Central Bank of Nigeria (CBN) and the Financial Reporting Council of Nigeria (FRCN) have implemented guidelines to improve audit quality and financial reporting standards. Despite these measures, concerns about audit independence, auditor competence, and regulatory compliance persist, often leading to questions about the reliability of financial reports (Adebayo & Okoro, 2023).
High-quality external audits can mitigate risks of financial misstatements and fraudulent practices, thus enhancing decision-making for investors, regulators, and other stakeholders. This study explores how external audit quality influences financial reporting accuracy in Access Bank Plc, shedding light on best practices and areas for improvement.
Statement of the Problem
In Nigeria, the banking sector has faced several scandals and financial misstatements, raising questions about the effectiveness of external audits. Despite regulatory reforms, there is skepticism about whether external auditors consistently deliver quality audits that ensure financial reporting accuracy.
Access Bank Plc, being one of Nigeria's largest financial institutions, serves as a critical case study to examine the impact of external audit quality. Issues such as auditor independence, inadequate expertise, and potential conflicts of interest often compromise audit quality. This study aims to address these concerns by evaluating the specific relationship between external audit quality and financial reporting accuracy in Access Bank (Oladipo & Ibrahim, 2024).
Objectives of the Study
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To assess the impact of external audit quality on the accuracy of Access Bank’s financial reports.
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To identify challenges affecting the quality of external audits in Access Bank.
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To evaluate the role of regulatory frameworks in ensuring high audit quality.
Research Questions
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How does external audit quality impact financial reporting accuracy in Access Bank?
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What challenges hinder the delivery of high-quality external audits in Access Bank?
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How effective are regulatory frameworks in improving external audit quality in Nigerian banks?
Research Hypotheses
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External audit quality significantly improves financial reporting accuracy in Access Bank Plc.
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Challenges in the external audit process negatively affect the accuracy of Access Bank’s financial reports.
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Regulatory frameworks play a significant role in enhancing external audit quality in Nigerian banks.
Scope and Limitations of the Study
The study focuses on Access Bank Plc, specifically analyzing financial reports from 2015 to 2025. It examines the quality of external audits conducted within this period and evaluates the role of auditors, regulatory frameworks, and organizational practices. Limitations include restricted access to audit reports and reliance on secondary data for analysis.
Definition of Terms
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External Audit Quality: The degree to which an external audit provides accurate, reliable, and unbiased assurance on financial statements.
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Financial Reporting Accuracy: The extent to which financial statements reflect the true financial position and performance of an organization.
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Access Bank Plc: A leading Nigerian bank providing financial services to various stakeholders.
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