AUDIT QUALITY ATTRIBUTES AND MARKET VALUE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study examines how key audit-quality attributes—audit fees, audit tenure, and audit report lag—affect the market value of listed deposit money banks in Nigeria, using market price per share (MPS) as the indicator of firm value. The study adopts an ex-post facto research design and utilizes secondary data obtained from the annual reports and NGX fact books of eleven purposively selected banks covering the period 2009–2023. An Autoregressive Distributed Lag (ARDL) model was employed to capture both short-run and long-run dynamics after conducting all necessary diagnostic evaluations. The empirical results show that each audit attribute exerts a significant influence on market value only in the long run: audit fees and audit report lag exhibit a positive long-run effect on MPS, while audit tenure demonstrates a negative long-run effect. These findings suggest that sustained audit effort and more thorough reporting processes may strengthen investor confidence over time, whereas extended auditor–client relationships could raise independence concerns that weaken firm valuation. Overall, the study reinforces the relevance of audit-quality indicators in explaining long-term market value and recommends enhanced audit transparency, periodic auditor rotation, and more efficient reporting processes to improve investor perception and support market stability.