GASPRO International Journal of Eminent Scholars

The study investigated relationship between audit quality with respect to specialized auditor and auditor opinion with earnings management of quoted financial institutions in Nigeria The population of this study comprised all the banks and insurance companies that are listed on the Nigerian Stock Exchange (NSE) from 2007 to 2011. The study adopted the cross sectional research approach while stratified random sampling technique was used in selecting the respondents. Data collected were analyzed using descriptive statistics and inferential statistics was used to test the hypotheses. From the results of the data analysis, it was observed that there is remarkable relationship between quality factors as regard specialized auditor and auditor's opinion with earnings management in some financial institutions in Nigeria. In conclusion, the study provided both empirical and statistical evidence on the usefulness of audit quality factors namely: specialized auditor and audit opinion in explaining and predicting opportunistic earnings management in sampled financial institutions in Nigeria. It was therefore recommended that the regulatory agencies should create more awareness on the concept of corporate governance mechanism and its role in developing the financial sub-sector of the economy.