IMPACT OF CONTINUOUS AUDIT ON AUDIT QUALITY IN NIGERIAN BANKS

Abstract

The study examines the impact of the internal audit function of continuous audits on audit quality in Nigerian banks. The specific objectives of the study were to investigate; the impact of continuous audits on audit quality in terms of enhancing the control environment, improving control activities, facilitating risk assessment, and promoting monitoring activities in Nigerian banks. The population of the study consisted of the 22 deposit money banks listed on the stock exchange but 8 banks were eliminated because of their inability to satisfy the selection criteria. Purposive sampling technique was used to select 10 respondents from the internal control and internal audit departments of the 14 selected banks. Only 83 out of the 140 copies of the questionnaire sent out were returned and found usable. Data obtained was analyzed using descriptive statistics and correlation and regression analysis. The results showed that the internal audit function of continuous audit had a significant impact on audit quality in terms of enhancing the control environment and control activities and, by promoting monitoring activities it also strengthens the risk assessment of banks and consequently impacts on the quality of statutory audit carried out by the external auditor. The study concludes that continuous audit is an effective strategy in enhancing internal control and managing risks in the banking sector. It was recommended that organizations should concentrate on proactively and deliberately managing risks arising from their core competencies as well as critical technologies and processes needed to ensure continued market leadership by leveraging on continuous audit. This is because continuous audit ensures compliance with organizational policies, which are crucial to the achievement of organizational objectives and enhancing organizational effectiveness.