International Journal of Economics, Commerce and Management AUDIT COMMITTEE CHARACTERISTICS, BOARD CHARACTERISTICS AND FINANCIAL REPORTING QUALITY IN NIGERIA (original) (raw)
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2021
The aim of this paper is to assess the impact of board attributes and the audit committee on financial reporting quality among the commercial banks in Nigeria. Secondary data of published annual reports from 20 commercial banks were collected, analysed and interpreted using the content analyses technique covering ten year periods from 2010 to 2019.The model adopted for the study is Modified Jones model due to its robustness in computing discretionary accruals (Earnings Management) which serves as a proxy of financial reporting quality. Additionally, the Ordinary Least Square (OLS) regression technique was also adopted in the analysis of this study. The findings derived from this study indicate that audit committee with sufficient independent members has a positive impact in reducing earnings management and consequently improving the reporting quality. Similarly, positive impact of the size of the board on the reporting quality has been recorded. Subsequently, the findings also demonstrate that the composition of the board has a positive impact on the reporting quality. The study thus concludes that audit committee composition has an effect on the overall quality of financial reports in commercial banks in Nigeria. The paper therefore, emphasizes the on the need to fortify the composition and task of the audit committee principally in the supervision function on the financial statements in order to enhance the financial statement quality. The composition and size of the board members of banks in Nigeria should be upgraded. In addition, the board should be empowered to exercise a more vital function in financial statement process.
This study investigates the effects of audit committee characteristics on the quality of financial reporting by deposit banks in Nigeria. The study employs a multivariate regression analysis to assess the aggregate and individual effect of certain audit committee characteristics on financial reporting of sample banks. The study documents a positive relationship between audit committee independence and quality of financial reporting. Findings also revealed that audit committee expertise has positive effect on the quality of financial reporting. Results demonstrate that audit committee size has an insignificant effect on quality of financial reporting; however, an aggregate significant effect of audit committee characteristics on financial reporting quality was established. The recommendations from this study highlight the need for financial expertise as a means of strengthening the monitoring and oversight role that the audit committee plays in financial reporting. Also, emphatic con...
Research Journal of Finance and Accounting
The objective of this study is to evaluate the impact of Audit Committee on financial reporting quality in Nigerian quoted companies. Data for the study were derived from annual reports of one hundred and thirty-one (131) companies quoted on the Nigerian Stock Exchange for the periods, 2006 to 2012. The data were analyzed using descriptive statistics as well as correlation and Ordinary Least Squares (OLS) regression. The multivariate regression technique was utilized to estimate the model. Using the panel regression estimation results, we found that each of the identified audit committee attributes, such as: frequency of meetings, financial literacy, independence, size and attendance at meetings had a positive significant effect on financial reporting quality. Based on these findings, the paper recommends the need for training and seminars to be organized for members of audit committee with a view to enabling them keep abreast of up to date information as regards their roles and responsibilities, to make them more effective and efficient in their assignments. In addition, the Securities and Exchange Commission of Nigeria should put in place a regulation, which ensures that audit committee members maintain at least, an attendance level of 85%, for them to be retained in the audit committee for the following financial year
This study examines the effect of audit committee tenure on financial reporting quality of listed deposit money banks in Nigeria. The study uses panel data obtained from the Nigerian Stock Exchange factbooks and the financial statements of 14 listed deposit money banks over a period of 10 years (2007-2016). The study uses cross sectional and time series research design. Financial reporting quality was measured using the modified Jones (1991) model and changes in working capital model, while audit committee tenure was measured as the mean tenure of audit committee members. The data was analyzed using descriptive (mean, standard deviation, minimum and maximum) and inferential statistics (correlation and regression analysis). The study reveals that audit committee tenure has a negative and insignificant effect on financial reporting quality under the two models. The implication of these results is that the tenure of audit committee members is not important when considering the financial reporting quality of deposit money banks in Nigeria. The study therefore concludes that the effect of audit committee tenure on financial reporting quality of deposit money banks in Nigeria is negative and insignificant. Based on this conclusion, the study recommends that further research should be conducted on other audit committee attributes in order to see which of the attributes may have significant effect on financial reporting quality.
Board Structure and Audit Quality in the Nigerian Banking Sector
Kogi Journal of Management, 6(3), 174-191 , 2020
The goal of a statutory audit is to ascertain whether an organization provides a fair and accurate representation of its financial position by examining relevant information. Corporate scandals confirmed a need for high-quality audit and considerable attention to different factors that may affect audit quality. Sequel to the aforementioned, this study examined the relationship between board structure indices and audit quality of Deposit Money Banks (DMBs) in Nigeria. Using ex-post facto research design, the study assessed a population of 9 DMBs in Nigeria with international authorization as of 31st December 2018. A sample size of 4 DMBs was randomly selected. The results of the regression analysis indicated the existence of a positive and statistically significant relationship between board size and audit quality of DMBs in Nigeria (p < 0.002); the existence of a positive but not statistically significant association between board independence and audit quality of DMBs in Nigeria (p < 0.278); and the existence of a positive but not statistically significant relationship between board heterogeneity and audit quality of DMBs in Nigeria (p < 0.641). Overall, the results indicated the existence of a positive association between board structure and audit quality. The study recommended that board size should be reasonably large enough to guarantee quality oversight function; board members should include a considerable number of females, and the proportion of the non-executive directors in the board should be substantial to encourage impartial and objective decisions by the board.
Audit Committee Quality and Financial Reporting in Deposit Money Banks in Nigeria
Asian Economic and Financial Review, 2021
The credibility of financial reporting is crucial as it assures the user of its authenticity. In this study, we examined the effect of audit committee quality on the quality of financial reporting of deposit money banks in Nigeria. A descriptive research design was adopted and secondary data sourced from annual accounts of seven deposit money banks for seven years were used to test our hypotheses. The dependent variable in this study is financial reporting quality measured with accrual model. In contrast, the independent variables are the number of members on the audit committee with accounting and finance knowledge, the size of the audit committee, the number of audit committee meetings held in a year and audit committee independence. Descriptive statistics, normality test, a multicollinearity test and regression analysis were used to examine the data. A notable outcome revealed that except for several audit committee meetings held in a given year the other independent variables were found to be insignificant and are not, therefore, determinant of financial reporting quality in deposit money banks in Nigeria. The study concluded that audit committee quality is not a determinant of financial reporting quality in deposit money banks in Nigeria and the study recommends that ability should be paramount for the appointment of members to the audit committee and advises that the audit committee should always be given adequate consideration by management in decision making. Contribution/Originality: This study is one of very few that has investigated the effect of audit committee quality on the quality of financial reporting of deposit money banks in Nigeria using an accrual model.
Board of directors and quality of financial reports of quoted banks: Evidence from Nigeria
CERN European Organization for Nuclear Research - Zenodo, 2022
This study was carried out to examine six characteristics representing the board of directors (size, independence, meetings, tenure, gender and expertise) of board of directors and their impact on quality of financial reports. A correlational research design was used to examine influence of board quality of financial reports using 12 listed deposit money banks. Finding suggests board shows enormous influence on quality of financial reports. Specific findings show that financial reporting quality will be higher if the size of the board of directors is increased. However, board tenure and expertise cause leads to poor financial reporting quality. In addition, we do not find evidence that board independence, meetings and gender improve quality of financial report. Among other recommendations, the study suggest that the number of board members should be increased since evidence has shown that it enhances financial reporting quality, while the tenure of board members should be reduced since it decreases financial reporting quality.
Research Journal of Finance and Accounting, 2015
Audit committee is a statutorily corporate governance mechanism introduced to curb financial reporting manipulation therefore enhanced the quality of financial reports. However, the effectiveness of the audit committee is dependent on its attributes. This paper examines the influence of the audit committee attributes of independence, meeting frequency and attendance on the financial reporting quality of listed deposit money banks in Nigeria. Data was generated from the annual reports and accounts of six purposively sampled banks during the period 2003 to 2012. The data was analyzed using Pearson correlation statistics and OLS regression. The results show that audit committee independence has negative and significant influence on financial reporting quality of listed deposit money banks in Nigeria. While, audit committee meeting frequency and attendance has positive and significant influence on financial reporting quality of listed deposit money banks in Nigeria. The paper recommends...
Audit Committee Financial Expertise: Antidote for Financial Reporting Quality in Nigeria
Audit committee financial expertise is vital to the quality of financial reporting. This study empirically investigates the impact of audit committee financial expertise on the quality of financial reporting. The financial reporting quality was measured by reliability (total accrual quality) and relevance (audit report lag). Fifteen money deposit banks were selected and data was collected for the period (2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012). Analyses were carried out using Correlation, Ordinary Least Square and Panel Lest Square. The study found, after controlling for firm size, audit type, age of firm, audit committee meeting and audit committee size, that, audit committee financial expertise showed a negative coefficient for total accrual quality and audit report lag. This means financial expertise has a positive significant impact on financial reporting quality in Nigeria. The study, therefore, recommends that more attention should be given to the financial expertise of directors being recommended to the audit committee.
2016
This study aims at examining the influence of audit committee attributes on the quality of financial reporting (QFR) in Nigerian banks. The study adopts a content analysis method in realizing the above objectives. The researcher-constructed measurement check-list was used in extracting data from audited annual reports of ten selected banks for the period 2006 to 2013. The dependent variable of study was the QFR, which was measured using the IFRS qualitative characteristics model. The independent variables consist of audit committee attributes and control variables (board attributes) were gleaned from the corporate governance section of the annual reports. Inferential statistics, namely; correlations and regression analyses were used in analyzing the data and testing the hypotheses raised in the study. The regression analysis result shows a t-value of 1.861 at 5% probability level, against the t-cal of 2.111. Specifically, the result shows that audit committee independence (p= .017),...