Auditors’ Independence, Information Technology and Audit Quality in Public Sector: A Study of Government Parastatals in Southwest, Nigeria

Abstract

The impact of auditor independence and information technology on audit quality in government parastatals in Southwest, Nigeria was investigated. This study was motivated by the longstanding concerns about low audit quality, financial management and accountability, and weak oversight in the public sector. In particular, the study examined the auditor's tenure, provision of non-audit services, the use of computerised accounting systems and audit software and digital tools as components of auditor independence and information technology. A mixed research design was used and a sample of 345 respondents from the respective offices of the Auditor-General for Southwest, Nigeria and Auditor-General for Local Government were used for data collection with a structured questionnaire. The analysis for the data was done descriptively, and simple regression analysis on SPSS software version 26. The regression results indicated that all the variables that explain the audit quality were positive and there was significant statistical difference among the various variables. The results revealed that the tenure of the auditor (β = 0.515, p = 0.000) and audit software/digital tools (β = 0.434, p = 0.031) had significant positive effects on audit quality. But the non-audit services provided by the auditors (β = 0.498, p = 0.054) and the adoption of computerized accounting systems (β = 0.572, p = 0.076) were positive but not statistically significant. The model summary showed that the independent variables are able to explain the variation in audit quality by about 41% (R² = 0.412), which can be considered as having relatively moderate explanatory power. The study suggests that auditor independence and information technology have significant effect on audit quality in government parastatals in Southwest, Nigeria. Overall, the study suggests that audit effectiveness and public sector accountability can be strengthened by implementing better audit tenure policies, increasing the use of digital audit tools and increasing the effectiveness of the implementation of computerised accounting systems.