EFFECT OF AUDIT COMMITTEE CHARACTERISTICS ON CORPORATE FINANCIAL REPORTING QUALITY IN NIGERIAN CONSUMER GOODS SECTOR

Abstract

The effect of audit committee characteristics on corporate financial reporting quality in Nigerian consumer goods sector was investigated in this study. This study aims to assess whether the published annual financial statements of companies in Nigerian consumer goods sector pass the required quality as to guide users in their decision making. For the purpose of this study, secondary data were explored, while the source of the data include the financial statements (statement of comprehensive income, statement of financial position, statement of cash flows and non-financial information) of the sampled companies in the consumer goods sector in Nigeria for the period 2013 to 2020. This study adopts ex-post facto research design to investigate the relationship as well as the effects of the audit committee characteristics on the financial reporting quality of companies in the consumer goods sector in Nigeria. The findings from this study reveals that audit committee size has a positive and significant effect on quality of financial reporting among listed companies in the Nigerian consumer goods sector. Further result from this study indicate that audit committee independence, gender and meeting have no significant impact on quality of financial reporting among listed companies in the Nigerian consumer goods sector. Hence, the study concluded that audit committee size has a positive significant effect on quality of financial reporting among listed Nigerian companies in the consumer goods sector. The study recommended that more non-executive directors should be included in the audit committee to improve the independence of the committee. The study also recommends further that more females should be included in the audit committee to improve the audit gender diversity of the committee. The study also recommends that the committee should meet more frequently during the year.