We ascertain the effects of International Financial Reporting Standards (IFRS) adoption on the audit fees payable by listed Deposit Money Banks (DMB) in Nigeria. Data for the study was collected from the annual reports of the 15 listed DMBs in Nigeria. The study period spanned two accounting standard regimes: the Nigerian Statements of Accounting Standards (SAS) (2009- 2011) and the IFRS (2012-2014). We analysed the effect of IFRS adoption on audit fees in Nigeria in two ways: first we compared audit fees and the known determinants (audit task complexity and reporting quality) under the two standards regimes using a paired-sample t-test. Second, we employed multivariate analysis to examine and explain the combined effect of audit task complexity, financial reporting quality and IFRS in explaining the change in audit fee following IFRS adoption. We found that audit fees are significantly higher under the IFRS than under the SAS; we also found that IFRS adoption has significantly increased audit complexity and improved financial reporting quality. We conclude that less than 50% of the significant increase in audit fees following IFRS adoption is explained by IFRS task complexities. We recommend further research to ascertain the other factors that could have led to the significant increase in audit fees of DMBs. Lastly, given that the quality of financial reporting increased with IFRS adoption recommend that accountants, regulatory authorities, professional bodies and all other parties in financial reporting chain should deepen their knowledge of IFRS.
Keywords: Audit Fees, IFRS adoption costs, Money Deposit Banking, Nigeria