Effect of Audit Fees and Audit Tenure on Earnings Management of Listed Deposit Money Banks in Nigeria

This paper assesses the effect of audit fees and audit tenure on earnings management of listed deposit money banks in Nigeria. The population consists of the 14 DMBs in Nigeria spanning from 2011 to 2021, out of which twelve banks were selected as the sample size using a criterion on the availability of data. The paper uses a longitudinal research design to investigate the effect of audit fees and audit tenure on the earnings management of listed DMBs in Nigeria. The audited financial annual reports of the banks chosen were used to collect data for the independent variables such as audit fees and audit tenure, as well as the dependent variable earnings management. The Generalized Method of Moment (GMM) was then employed for analyzing the data. The result shows that audit fee had a coefficient of -0.1461at a significant level of 0.0000. Audit tenure has positive coefficient of 0.1405at a significant level of 0.0001 influences on listed DMBs' management of earnings in Nigeria. The study therefore concludes that, audit fee curtail EM of listed DMBs in Nigeria while audit tenure do not ameliorate EM of listed DMBs in Nigeria. In order to prevent the threat of familiarity, the paper recommends that DMBs in Nigeria should stick to the statutory and professional standard audit fees and discourage long-term audit firm retention.