Value For Money Audit And Operational Efficiency Of Listed Deposit Money Banks In Nigeria
Description
Operational efficiency remains a major governance concern for listed deposit money banks in Nigeria because banks are exposed to rising operating costs, digital transformation pressure, cyber-risk exposure, risk governance demands and shareholders’ expectation of sustainable value creation. This study examined the relationship between value for money audit and operational efficiency of listed deposit money banks in Nigeria. Value for money audit was decomposed into economy audit, efficiency audit, effectiveness audit, ethics audit and equity audit, while operational efficiency was proxied by the cost-to-income ratio. The study adopted an ex-post facto and content analysis research design. A balanced panel of one hundred and thirty firm-year observations was obtained from thirteen listed deposit money banks and banking holding companies for the ten-year period 2015-2024. Data were analysed with descriptive statistics, correlation analysis, variance inflation factors, residual diagnostics, fixed effects regression with robust standard errors, panel-corrected standard errors, feasible generalized least squares and dynamic panel robustness checks. The empirical outputs were presented in the EViews 10.0 result format. The findings revealed that economy audit has a significant negative relationship with cost-to-income ratio (coefficient = 0.0198; p = 0.0000), efficiency audit has a significant negative relationship with cost-to-income ratio (coefficient = 0.0259; p = 0.0000), and effectiveness audit has a significant negative relationship with cost-to-income ratio (coefficient = -0.0143; p = 0.0000). Ethics audit and equity audit also showed negative coefficients, but their effects were not significant at the 5% level in the main fixed-effects model. The study concluded that value for money audit improves operational efficiency when audit work is strongly linked to cost discipline, process productivity and strategic outcome assessment. It recommended that boards, audit committees and internal audit departments of listed deposit money banks should institutionalize value for money audit scorecards across procurement, branch operations, digital platforms, outsourcing arrangements, customer-service processes and strategic projects.
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This study adopted an ex-post facto and content-analysis research design. The ex-post facto design was appropriate because the variables used in the analysis were historical and had already occurred, leaving no room for the researcher to manipulate the dependent and independent variables. The content-analysis design was also appropriate because the value for money audit variables were obtained by coding disclosures in published annual reports, corporate governance reports, sustainability reports and risk management reports.
Institutions
- Akwa Ibom State UniversityAkwa Ibom State, Uyo