Auditor Independence and Audit Quality in Nigerian Banks: Mediating role of Auditor-Client Relationships

The study mediates the effect of auditor-client relationships on the association between auditor independence and quality audits within the Nigerian banking sector. A non-probability convenience sampling method was utilized to gather data from 150 internal auditors working in Nigerian banks. Data analysis was performed with the aid of Path Analysis-Structural Equation Modelling (PA-SEM). The results of the Path Analysis with Structural Equation Modeling (SEM) highlight the nuanced relationship between auditor independence, auditor-client relationships, and audit quality in the banking sector. The study provides evidence of a partial mediating effect of auditor-client relationships on the relationship between auditor independence and the quality of audits. Both auditor independence and auditor-client relationships independently predict quality audits, aligning with established guidelines. This conclusion underscores the need for a comprehensive understanding of the multifaceted factors influencing audit quality in the banking industry. Therefore, the policymakers should consider reviewing and updating existing regulatory frameworks to incorporate the importance of both auditor independence and auditor-client relationships in ensuring audit quality.