Impact of Audit Quality on Fraud Prevention in Quoted Deposit Money Banks in Nigeria
Year: 2026
Type: article
Abstract: Fraud remains a persistent challenge in Nigeria’s banking sector, particularly among quoted deposit money banks (DMBs), despite stringent regulatory oversight and internal control mechanisms. Weak audit quality has been identified as a critical factor that can exacerbate the risk of fraudulent activities, undermining stakeholder confidence and financial integrity. The main objective of this study was to examine the impact of audit quality on fraud prevention in Nigerian quoted DMBs, focusing specifically on three dimensions of audit quality: auditor competence, auditor independence, and audit evidence quality. The study employed a combined ex-post-facto and survey research design, collecting primary data from 70 respondents across 14 listed deposit money banks as of December 31, 2025. Census sampling was used to ensure full population coverage. Data were gathered using a structured Likert-scale questionnaire adapted and analyzed using descriptive statistics, correlation analysis, multicollinearity diagnostics, and multiple linear regression to empirically test the hypothesized relationships. Findings reveal that all three dimensions of audit quality positively and significantly influence fraud prevention, with audit evidence quality exerting the strongest effect, followed by auditor independence and competence. The study concludes that high-quality audits serve as a proactive mechanism for detecting irregularities, strengthening internal controls, and enhancing transparency in financial reporting. Based on these results, it is recommended that banks prioritize continuous professional development for auditors, enforce strict independence policies, and adopt robust systems to enhance audit evidence quality. Integrating these measures into governance frameworks will improve fraud prevention and safeguard financial integrity in Nigerian DMBs. Keywords: Audit Quality, Auditor Competence, Auditor Independence, Audit Evidence Quality, Fraud Prevention.
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7225636774
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