Drivers of Audit Quality in Oyo State Government Parastatals: The Joint Role of Auditors' Independence and Information Technology

Abstract

Audit quality remains a critical yet under-examined governance concern in Nigerian sub national government parastatals, where recurring audit queries and unresolved financial irregularities continue to undermine public financial accountability. This study investigates the joint drivers of audit quality in Oyo State government parastatals, focusing specifically on the combined contribution of auditors' independence and Information Technology (IT) adoption. Anchored in Agency Theory, the study adopted a quantitative, explanatory cross sectional survey design. Data were collected from 189 respondents comprising audit staff, management staff, and administrative/support personnel of the Office of the Auditor-General for Oyo State and the Office of the Auditor-General for Local Government, selected through stratified random sampling from a population of 415 employees. A structured questionnaire, validated for content and construct validity and found reliable (Cronbach's alpha = 0.855), was used for data collection, and hypotheses were tested using multiple linear regression. Findings: The joint model comprising auditors' independence and Information Technology explained 61.2 percent of the variance in audit quality (R = 0.782, R² = 0.612, Adjusted R² = 0.607, F(2,186) = 146.408, p < 0.001), leading to rejection of the null hypothesis. Auditors' independence emerged as the dominant driver (Beta = 0.653, p < 0.001), while Information Technology retained a smaller, though statistically significant, unique contribution (Beta = 0.183, p = 0.002) once shared variance with independence was accounted for. Collinearity diagnostics (VIF = 1.672; tolerance = 0.598) confirmed that the estimates were stable and not distorted by multicollinearity. Practical implications: The findings indicate that structural and legal reforms strengthening auditors' independence should precede, and be prioritised over, technology-centred interventions, since the incremental explanatory contribution of Information Technology beyond independence is comparatively modest. Originality/value: This study contributes context-specific empirical evidence, rare in sub Saharan African public sector auditing research, on the relative and joint importance of institutional independence and technological capacity as drivers of audit quality, and offers a replicable evidentiary basis for audit-reform prioritisation in resource-constrained government settings.