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Impact of board characteristics on auditor choice by deposit money banks in Nigeria

Impact of board characteristics on auditor choice by deposit money banks in Nigeria The issue of board characteristics has received attention from the auditing profession due to users' demand for good governance. This study examined how board characteristics affect the selection of auditors by deposit money banks in Nigeria through the use of ex-post facto research design. The study used secondary data collected from annual reports of six selected banks in Nigeria for the period of ten years covering 2008-2017. Panel logistic regression was adopted. Findings revealed that board size had positive and significant relationship with auditor choice (0.758). Board independence and financial leverage exhibited negative but significant relationship with auditor choice (−10.71: −25.69). The study concluded that board size, board independence and financial leverage are important factors in the selection of high quality auditor by banks. It was recommended that independent directors should be allowed to take active part in the day to day activities of the banks to boost their operational efficiency. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of Accounting, Auditing and Finance Inderscience Publishers

Impact of board characteristics on auditor choice by deposit money banks in Nigeria

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd
ISSN
2046-8083
eISSN
2046-8091
DOI
10.1504/AJAAF.2020.111732
Publisher site
See Article on Publisher Site

Abstract

The issue of board characteristics has received attention from the auditing profession due to users' demand for good governance. This study examined how board characteristics affect the selection of auditors by deposit money banks in Nigeria through the use of ex-post facto research design. The study used secondary data collected from annual reports of six selected banks in Nigeria for the period of ten years covering 2008-2017. Panel logistic regression was adopted. Findings revealed that board size had positive and significant relationship with auditor choice (0.758). Board independence and financial leverage exhibited negative but significant relationship with auditor choice (−10.71: −25.69). The study concluded that board size, board independence and financial leverage are important factors in the selection of high quality auditor by banks. It was recommended that independent directors should be allowed to take active part in the day to day activities of the banks to boost their operational efficiency.

Journal

African Journal of Accounting, Auditing and FinanceInderscience Publishers

Published: Jan 1, 2020

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