AUDIT COMMITTEE ATTRIBUTES AND FINANCIAL REPORTING QUALITY OF LISTED COMMERCIAL BANKS IN NIGERIA

Abstract

The study examined effect of audit committee attributes on financial reporting quality of commercial banks listed on the Nigeria stock exchange. It employed ex post facto research design and extracted data from annual reports of a cross section of 14 banks from 2007 to 2022. It employed audit committee attribute variables such as audit committee size, audit committee independence, audit committee meetings and board size while capital adequacy was used to measure financial reporting quality. The data collected were analyzed using panel regression analysis and the result reveled that audit committee size and audit committee independence have positive but insignificant effect on capital adequacy of listed commercial banks in Nigeria while audit committee meetings and board size have negative and insignificant effect on capital adequacy of listed commercial banks in Nigeria. Based on the findings, the study recommends that capital adequacy ratio of commercial banks should be improved by maintaining quality audit members who will be independence, ensure that they are up to six in number and ensure that they hold meeting at least four (4) times in a year. Audit committee members should monitor the liquidity position on a monthly basis and also ensure that the loan to deposit ratio is maintain consistently. However, commercial banks should increase the number of non-executive (independent) directors and also ensure that audit committee is constituted by independent persons, with high level of integrity that can match words with action to improve bank’s liquidity.