EFFECT OF EXTERNAL AUDIT OPINION ON THE TRANSPARENCY OF FINANCIAL REPORTING QUALITY OF SELECTED NIGERIAN DEPOSIT MONEY BANKS

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The growing complexity of business transactions brought about by globalization of capital markets have made it mandatory for regulators, and auditing firms to see the need for common standards in all areas of financial reporting. Despite these positive developments, the extent to which external audit opinion influences transparency of Financial Reporting Quality of selected Nigerian deposit money banks remains a subject of concern among participant in Nigerian Deposit Money Banks (NDMBs) sector. This study examined the nexus between external audit opinion and transparency of Financial Reporting Quality of selected Nigerian deposit money banks The study employed survey research design using structured questionnaire. The population of the study comprised of senior staff of accounting departments of selected NDMBs from where a sample of seven (7) banks were purposively selected based on ease of data collection. The respondents include twelve (12) senior staffs in the account departments of each of the sampled banks to give 84 respondents. Both descriptive and inferential statistics were employed for the purpose of the data analysis. Descriptive statistics include frequency tables and percentage count while inferential statistics such as multiple regression analysis was used to examine the effect of external audit opinion on transparency of FRQ of NDMBs. Findings from the multiple regression analysis showed that two of the five explanatory variables were significant in explaining variation in transparency of financial reporting quality. These are External Audit Firm Reputation (p= .000) and Perception of Financial Restatements (p=.035). The study concluded that there is a significant relationship between external audit opinion and transparency of FRQ of NDMBs. It is therefore recommended that NDMBs should continue to engage reputable external audit firms known for their stringent audit standards and independence. The significant positive impact of audit firm reputation on financial transparency underscores the need for high-quality audits.