EVALUATION OF CRITERIA INFLUENCING EXTERNAL AUDITORS' CHOICE IN NIGERIAN DEPOSIT MONEY BANKS

Johnson Kolawole OLOWOOKERE

Abstract


The main objective of this study was to evaluate the major criteria in selecting an external auditor in Nigeria Deposit Money Banks (DMBs). The study employed primary data. The population of the study is 192 directors (i.e. 8 members comprising one Finance director, six audit committee member and one company secretary) from the 24 Deposit Money Banks insured by the Nigeria Deposit Insurance Corporation as at 31st December 2015. The sample size of 130 respondents was determined using Yamene formula.The results showed that the most
important factors influencing the choice of external auditors were: auditor is one of the Big Four Accounting Firms, Technical Accounting Skill, and Long-Term Relationship with current Auditor.The study concluded that the audit market among Deposit Money Banks in Nigeria is dominated by the Big Four Audit firms. The market share gap between Big Four Audit firm and non-Big Four Audit firm has become wider, potentially reducing the possibility for non-Big Four Audit firm to become active player in the market. The study recommended that small and medium audit firms should be encouraged to consider the option of merging in order to
compete effectively with the Big Four Audit firms in the Nigerian audit market.

Keywords


Auditor Choice, Big Four, Non-Big Four, Deposit Money Banks, Nigeria

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International Journal of Management Science Research ISSN ISSN 2536 – 605X(Print)

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