AUDIT EFFICIENCY AS A TOOL FOR IMPROVING BANKING PERFORMANCE IN NIGERIA

Abstract

Many difficulties banks faced is as a result of inadequate loan polices, poor loan identification systems and systems to ensure compliance with internal polices and banking law. Insider abuse and fraud were significant factors in the decline of more than one-third of the failed banks: the Office of the Comptroller of the Currency (OCC) evaluated. The study also identified that internal weakness appears to have a great influence on the degree to which an adverse external environment harms the bank as a whole.The focus of a bank audit is on compliance. Its purpose is to discover if the institution’s financial activities are accurate, legitimate, and complete. Its primary goal is to provide an independent evaluation of the bank’s activities, controls, and information systems. This research work was designed to examine the effect audit efficiency as a tool for improving banking performance in Nigeriawas drivenby theinability of audit to prevent the occurrence of fraud and material misstatements in the bank’s financial reports. Thus, this study is aimed at finding out the extent to which the banking sectors in Nigeria have engaged competent appraisal and identify deficiency and inefficiency which are usually thought as not to be present and whether the bank is performing efficiently as expected.The study is adopted survey research design in carrying out this research. Three research questions and hypotheses were formulated in line with the objectives of this study. Data were obtained from a primary source which was the use of questionnaire. The data that was collected were then quantified and presented in tables. Multiple Regression Analysis using SPSS version was used in analyzing the data and testing the stated hypotheses. The population of the study consists of twenty-one (21) deposit money banksoperating inNigeria. The banks are categorized into three by their license according to bank regulatory bodies (CBN). Based on the data analyzed, the study found that auditor’s independence has positive but not significant relationship with banking performance in Nigeria; also that auditor’s tenure has positive but not significant relationship with banking performance in Nigeria and audit fees has positive but not significant relationship with banking performance in Nigeria. Based on this, the study recommended among others that auditor’s examination of the financial statements should be mandatorily subjected peer review, that is, not only one auditor should be given the sole responsibility of auditing the financial statements of the banks. Though, this may require additional costs, but it is expected to improving the performance for the banks.