Effect of Audit Fee on Audit Quality in Nigeria Deposit Money Banks

The capacity of the client company to initiate prompt payment of external auditors’ fee might motivate the auditor to improve the quality of their work. This could have a significant impact on the quality of the auditor report. Therefore, this paper assesses the effect of audit fee on audit report quality. To investigate the objective, an ex-post facto research design was adopted to gather time series data from the published annual report of the 14 quoted DMBs in Nigeria for the period 2004-2023. Moreover, audit fee was proxied using the amount of payable to the audit form by the selected DMBs. Other exogenous variables that might influence the quality of the audit report were also considered as part of the variables for the panel regression model used to investigate the objective. In addition, audit report quality was measured using the big-4 and earning management. The descriptive statistics and panel regression analysis were used to investigate the study. the finding of the study showed that audit fee had a significant positive effect on audit report quality when the big four was used as proxy for audit quality while it was not so with the earnings management. The study concluded that prompt payment of audit fee might enhance audit quality.