AUDIT COMMITTEE CHARACTERISTICS AND FINANCIAL REPORTING QUALITY OF LISTED FIRMS IN NIGERIA

Abstract

The issue of transparency in financial reporting has become a vital practice due to financial scandals experienced by the big companies in recent years. As a result of this, the study evaluates the determinants of audit committee transparency on financial reporting quality of listed firms in Nigeria. The study employed ex-post facto research design. The population of the study consists 171 companies listed on the floor of Nigerian Exchange Group. The study covered the period of 2015 to 2025. 56 companies were selected from the total population, using purposive sampling techniques. The study made use of secondary data. The research adopted descriptive statistics to analysis the variables. Panel least square and Generalised Method of Moment(GMM) was used in achieving the objectives. The result of correlation analysis shows that audit independence aids the financial reporting quality (1.042) and t-value of the variable (6.52) indicated that the variable was statistically significant. The audit expertise also contributed to the growth in the financial reporting quality of the firms. The coefficient of 0.595 and t-value of 7.27 indicated that rise in the number of audit expertise aid the financial reporting quality. The frequency of the audit committee meeting enhanced the financial reporting quality of the sampled firms in Nigeria. It aided the financial reporting quality with coefficient value of 0.108 and t-value of 3.64, audit committee expertise and audit meeting have a positive relationship with FRQ of the firm. The study concluded that audit independence, audit expertise and audit meeting, enhanced the financial reporting quality of firms in Nigeria. The study recommends that audit committee of the firms should comprise people who have adequate knowledge of financial activities. Those who can easily identify fraud and creative accounting.