AUDIT ATTRIBUTES AND FRAUDULENT PRACTICES IN LISTED DEPOSIT MONEY BANKS IN NIGERIA

The Nigerian banking industry continues to face ongoing challenges related to fraudulent financial activities, which pose risks to financial stability and undermine investor confidence. The prevalence of fraud has led to financial losses, loss of customer confidence and reputational damage to banks. Despite regulatory efforts, the challenges persist, raising concerns about the adequacy of existing control mechanisms. This study explores the connection between audit attributes and fraudulent practices among publicly listed deposit money banks (DMBs) in Nigeria between 2014 and 2023. The research aims to determine the prevalence of fraudulent activities, assess the influence of audit committee characteristics on fraudulent behavior, and examine how audit attributes impact financial misreporting. The study adopts an ex-post facto research approach, the population comprised of fourteen listed deposit money banks in Nigeria, a sample size of ten banks selected through purposive sampling. The data were collected from the published annual reports and accounts of the sampled banks. Both descriptive and inferential statistical techniques were applied, including correlation analysis, regression models, and the Beneish M-Score, to detect patterns of earnings manipulation in the sector. The findings revealed that audit committee independence and financial expertise significantly reduce the incidence of fraud in Nigerian banks. Regression analysis revealed that frequent audit committee meetings significantly lowered the chances of earnings manipulation (coefficient = - 0.0302, p < 0.05). In contrast, gender diversity within the audit committee exhibited a positive correlation with earnings management (coefficient = 0.005, p < 0.05). Additionally, firm size demonstrated a strong positive relationship with financial statement manipulation (coefficient = 0.735, p < 0.05). Results show that the Beneish M-Score remained below -2.22 throughout the study period, indicating a minimal probability of fraudulent financial activities. However, a peak closer to -2.22 in 2020 suggested possible financial distress, potentially influenced by the COVID- 19 pandemic. The study concluded that audit attributes, have a significant effect on mitigating fraudulent practices in Nigeria deposit money banks. The study recommends that Nigeria banks should strengthen their audit committees by ensuring a balance of independence, expertise, and accountability. Regulatory bodies should also reinforce corporate governance standards to improve audit quality, transparency, and investor confidence in the financial system.