MODERATING EFFECT OF INTERNAL AUDIT QUALITY ON THE RELATIONSHIP BETWEEN ACCOUNTING INFORMATION SYSTEMS AND FINANCIAL REPORTING QUALITY OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study investigated the moderating effect of Internal Audit Quality on the relationship between Accounting Information System and Financial Reporting Quality of listed Deposit Money Banks in Nigeria. The main objective was to determine how Accounting Information System attributes which includes Service Quality and System Control influence the quality of financial reporting and how Internal Audit Quality enhances or weakens these relationships. The study was underpinned by the DeLone and McLean (2003) Information System Success Model, Agency and Technology Acceptance theories, both emphasizing the role of technological and human resources in achieving efficient, reliable, and transparent reporting outcomes.

A cross-sectional survey research design was adopted. The population consisted of all fourteen (14) listed DMBs in Nigeria, from which data were collected from 140 respondents drawn from accounting, audit, and information technology departments. Census sampling was used, and the data were obtained through structured questionnaires based on a five-point Likert scale. The research instrument was validated through expert review and factor analysis, while reliability was confirmed using Cronbach's alpha. Data analysis employed Partial Least Squares Structural Equation Modeling due to its robustness in handling small samples and complex latent constructs. Diagnostic tests confirmed data normality, linearity, and absence of multicollinearity.

Findings revealed that all four Accounting Information System proxies significantly and positively influence financial reporting quality. Specifically, service quality contributed to the timeliness of financial information; and system control safeguarded data integrity and reliability. Furthermore, Internal Audit Quality was found to significantly moderate the relationship between Accounting Information System and Financial Reporting Quality, especially in areas of service quality and system control, implying that strong internal audit functions enhance data assurance, system reliability, and transparency in financial reporting.

It recommends that bank management should periodically review Accounting Information System processes, strengthen cybersecurity infrastructure, ensure effective internal audit oversight, and engage competent auditors with Information Technology expertise. Audit committees should also enforce audit recommendations and integrate audit oversight into Accounting Information System processes to enhance reliable, timely, and unbiased financial reporting in Nigerian banks.

Keywords: Accounting Information System, Internal Audit Quality, Financial Reporting Quality, Deposit Money Banks in Nigeria