Accounting Project Topics

Research Proposal on Examining the Effect of Audit Quality and Audit Fees on the Financial Performance of Ghanaian Banks

Research Proposal on Examining the Effect of Audit Quality and Audit Fees on the Financial Performance of Ghanaian Banks

Research Proposal on Examining the Effect of Audit Quality and Audit Fees on the Financial Performance of Ghanaian Banks


Objectives of the Study

This research seeks to achieve the following specific objectives:

  1. To assess the relationship between audit quality and the financial performance of Ghanaian banks.
  2. To examine the impact of audit fees on the financial performance of Ghanaian banks.
  3. To determine whether audit quality mediates the relationship between audit fees and the financial performance of Ghanaian banks.


Literature Review

Audit Quality

In the context of the Ghanaian banking sector, the concept of audit quality is of paramount significance (Ado et al., 2020). Audit quality refers to the degree to which an audit provides accurate and reliable information regarding the financial statements of an entity. Within the banking sector, the dimensions of audit quality encompass several critical elements (Iliemena & Okolocha, 2019).

Audit quality can be broken down into dimensions such as the competence of the audit firm and its personnel (Ezejiofor & Erhirhie, 2018). The expertise, experience, and proficiency of the auditors themselves are vital factors influencing the quality of an audit. Additionally, the objectivity, independence, and ethical standards adhered to by the audit firm are crucial dimensions that underpin audit quality (Phan et al., 2020).

Factors influencing audit quality within the Ghanaian banking sector are diverse and multifaceted (Soyemi, 2022). These factors include the regulatory environment, the quality of financial reporting, and the client-auditor relationship. Regulatory bodies play a pivotal role in setting the standards and guidelines that shape audit quality. Moreover, the quality of financial reporting by banking institutions directly affects the effectiveness of audits (Esplin et al., 2018).

The importance of audit quality in the banking sector cannot be overstated (Kyere & Ausloos, 2021). It serves as a fundamental mechanism to ensure transparency and reliability in financial reporting. High-quality audits offer assurance to stakeholders, such as investors, regulatory authorities, and the public, that the financial statements of banks are accurate and free from material misstatements (Khan et al., 2021).

In a sector as crucial as banking, where trust and financial stability are paramount, audit quality plays a pivotal role in instilling confidence and ensuring the integrity of the financial system. As banks are central to economic development and financial inclusion (Monametsi & Agasha, 2020), the quality of audits becomes a linchpin in upholding the country’s economic prosperity and maintaining public trust.

Audit Fee

In the context of the Ghanaian banking sector, audit fees represent the financial compensation paid by banks to audit firms for their services (Soyemi, 2022). These fees are a critical component of the audit process, as they underpin the financial arrangements between the auditors and their clients. Understanding the concept of audit fees is essential for exploring their relationship with audit quality and, ultimately, financial performance.

Audit fees are composed of several distinct components (Ezejiofor & Erhirhie, 2018). The primary component is the base fee, which is the standard payment for conducting the audit. However, audit fees may also encompass additional fees for services beyond the basic audit, such as special investigations, tax services, or advisory services (Monametsi & Agasha, 2020). This multi-component structure of audit fees highlights the complexity of the fee arrangement.

Determining the audit fees that banks pay to audit firms is a multifaceted process influenced by several factors (Baldavoo & Nomlala, 2019). These determinants include the size and complexity of the bank, the risk associated with the audit engagement, and the scope of the audit. Additionally, the reputation and expertise of the audit firm itself, as well as market competition, can have a significant impact on the negotiation of audit fees (Ogbodo & Akabuogu, 2018).



Research Methodology


This chapter outlines the research methodology employed in the study, which aims to examine the effect of audit quality and audit fees on the financial performance of Ghanaian banks. The methodology is designed to ensure the rigorous collection and analysis of data, aligning with the study’s objectives and adhering to ethical considerations.

Research Design

The research design for this study will be a cross-sectional approach, coupled with a quantitative survey research design. The cross-sectional approach allows data collection from a diverse group of respondents at a specific moment in time, which is particularly suited for assessing the simultaneous impact of audit quality and audit fees on the financial performance of Ghanaian banks (Saunders et al., 2019). This design provides a snapshot of the intricate relationships and variables, fulfilling the study’s objectives and offering valuable insights into the dynamic financial environment of Ghanaian banks (Bell et al., 2019).

Data Sources and Collection

The data for this research will be collected from secondary sources, including academic journals, websites, and official publications. These sources are chosen for their credibility and depth of information. Academic journals serve as repositories of peer-reviewed articles and reports, providing scholarly insights into audit quality, audit fees, and financial performance (Creswell & Creswell, 2018).

Websites maintained by governmental bodies, regulatory authorities, and financial institutions offer access to official publications, reports, and financial statements relevant to the Ghanaian banking sector. These sources provide essential data for the examination of financial performance and the factors influencing it within the banking industry (Gray, 2018).

The utilization of secondary data sources ensures a comprehensive foundation of information for the study, allowing for rigorous analysis and a thorough examination of the relationships between audit quality, audit fees, and financial performance in Ghanaian banks.


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  • Al-ahdal, W. M., & Hashim, H. A. (2021). Impact of audit committee characteristics and external audit quality on firm performance: evidence from India. Corporate Governance: The International Journal of Business in Society.
  • Aledwan, B. A., Yaseen, A. A. B., & Alkubisi, A. (2015). The role of audit quality on the relationship between auditors and financial performance quality of selected cement firms in Jordan. International Journal of Business and Social Science, 6(12), 138-146.
  • lsmairat, Y. Y. Yousef, Yusoff, W. S., Fairuz, M., Saleh, M., & Norida, B. (2018). International diversification, audit quality, and firm value of Jordanian public listed firms. Academy of Accounting and Financial Studies Journal, 22(Special Issues), 1-7.
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  • Aobdia, D., Lin, C. J., & Petacchi, R. (2015). Capital market consequences of audit partner quality. The Accounting Review, 90(6), 2143-2176.
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