ABSTRACT
The study ascertained the relationship between audit quality and return on asset of commercial banks in Nigeria; determined the effect of audit quality and return on asset of commercial banks in Nigeria; the relationship between audit committee effectiveness and organizational performance of commercial banks in Nigeria, in order to examine the impact of audit quality on organizational performance. The study employed secondary data which were obtained from the annual reports of selected quoted companies on the Nigeria stock exchange. A sample of sixteen (16) commercial banks were purposively selected based on the availability of information. Model was formed to test the data obtained using correlation research design with the aid of E-view econometrics package. The result showed that the F-statistic of 1.614771 is significant at 5 percent level as the probability value estimate of 0.036862 has indicated. The F-statistics shows that Audit committee, Audit committee expertise, Audit committee frequent meeting, Audit committee Size, Audit fee, Audit period, and firm size are jointly significant in explaining returns on assets (dependent variable). The coefficient of the independent variables, that is Audit committee, Audit committee expertise, Audit committee frequent meeting, Audit committee Size, Audit fee, Audit period, and firm size for instance are all positive except for Audit fee and Audit period, these positive values show that a unit increase in these variables for instance will increase returns on assets by 11.79%, 2.24%, 0.22%,72.50% and 17.13% respectively in the short run, Audit fee and Audit period which has negative coefficients imply that a unit increase in these variables for instance will reduce return on assets by 3.18 % and 4.68% respectively. The study concluded that adequate audit quality is essential as it has a direct impact on the performance of commercial banks in Nigeria, quality audit reduces the agency cost and it enhances the credibility of financial statement which has a positive impact on the performance of commercial banks in Nigeria.