BOARD INDEPENDENCE AND AUDIT QUALITY: THE MODERATING EFFECT OF INFORMATION TECHNOLOGY ON LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract The persistent financial scandals in the Nigerian banking sector and globally have raised concerns about the effectiveness of corporate governance mechanisms. While corporate governance is essential in curbing financial misconduct, its impact is significantly enhanced by high audit quality and IT-driven processes. This study investigates the relationship between corporate governance and audit quality, with a particular focus on the moderating role of board IT expertise. Using a panel data approach, the study analyzed data from listed deposit money banks in Nigeria between 2014 and 2023. Key corporate governance variables considered include board independence, board audit committee, and board IT expertise. Findings reveal that board independence, and board audit committees show no significant impact on audit quality. The study further establishes that board IT expertise significantly moderates the relationship between board independence with audit quality. These findings underscore the importance of integrating IT expertise in corporate governance structures to strengthen financial reporting and oversight functions. The study recommends that deposit money banks enhance their board composition by incorporating IT-skilled professionals to improve audit quality and overall governance effectiveness. Policymakers and regulators should revise existing guidelines to mandate that at least one independent non-executive director on the board possesses IT expertise. Failure to comply should be considered a regulatory infraction, ensuring stricter enforcement of IT governance practices within board structures to enhance transparency, accountability, and financial stability in the banking sector.