AUDIT QUALITY AS A MODERATOR OF CORPORATE GOVERNANCE RISKS AND MARKET VALUE: EVIDENCE FROM NIGERIA’S QUOTED DEPOSIT MONEY BANKS

The study objective is to examine the moderating effect of audit quality (AQ) and corporate governance risks management on market value of quoted deposit money banks (DMBs) in Nigeria for period of 2018 to 2023 of the Nigeria code of corporate governance implementation. The study used a sample of the Twelve (12) quoted banks out of the population of Fourteen (14) using purposive sampling technique. Longitudinal research design was adopted and secondary data were analyzed through Panel regression model. The study results with R-square of 89% revealed positive significant effect of board size, Board independence, Agency accounting mitigating factor and (AQ) on market value measured in the modified Tobin-Q of DMBs but the variables were also significant when they were moderated with (AQ); but management report lag was positively insignificant. The study concluded that audit quality has strong moderating effect on risks management and market value and accounting monetary benefits alignment is the major factor that reduces conflicts of interest (risks) to maximize shareholders wealth. Also, a proportionate increase in board size to the assets of banks and increase in number of non-executive directors reduce corporate governance risks thereby increase market value of quoted DMBs. It is recommended that government through the CBN and FRCN mechanism should make policies to promote audit firm’s merger, specialization and reserve certain sensitive industry to certain size of audit firms to audit. Also, the minimum number of non-executive directors in DMBs board should be pecked at 75% proportion and benefits alignment ratio between management team and shareholders should be pecked at range of 60% to 40% respectively.