AUDITORS' INDEPENDENCE AND RELIABILITY OF FINANCIAL REPORTS IN BANKING INDUSTRY

This study evaluates the impact of auditor independence on the reliability of financial reports in Nigeria's banking sector, focusing on audit fees, audit tenure, and non-audit services. The objective was to determine how these variables influence the accuracy, transparency, and credibility of financial reporting. A quantitative research design was adopted, and linear regression analysis was utilized to test three hypotheses based on data collected from stakeholders in the banking industry. The findings revealed that audit fees positively and significantly influence the reliability of financial reporting, accounting for 95.6% (R² = 0.956) of the variance, with a strong correlation coefficient of 0.978. Similarly, audit tenure exhibited a significant positive effect, contributing 93.1% (R² = 0.931) to the reliability of financial reports and a correlation coefficient of 0.965. In contrast, non-audit services were found to have a statistically significant but negative impact on financial reporting reliability, explaining 95.6% (R² = 0.956) of the variance, with a correlation coefficient of 0.968. All hypotheses were significant at p < 0.05, leading to the rejection of the null hypotheses and affirming the importance of audit independence. The study concludes that maintaining appropriate audit fees and ensuring optimal audit tenure enhance the reliability of financial reporting, while excessive non-audit services compromise auditor independence. It recommends stricter regulatory oversight of non-audit services and policies supporting auditor independence to improve the quality and reliability of financial statements in Nigeria's banking sector. Keywords: Auditor Independence, Audit Fees, Audit Tenure, Non-Audit Services, Financial Reporting Reliability, Banking Sector, Nigeria. Word count: 233 words