Audit Committee Characteristics and Financial Reporting Quality: Nigerian Non-Financial Listed Firms

This study aims to investigate the effect of audit committee characteristics on the quality of financial reporting of Nigerian listed firms. We employed multivariate regression analysis with a sample size of 101 and firms-year longitudinal panels of 505 observations of non-financial listed companies on Nigerian Stock Exchange for the period 2010 to 2014. We adopt McNicholas (2002) model to examine the monitoring mechanisms on the quality of financial reporting. The results show that control variables; company age and company size are statistically significant. Audit committee share ownership, and financial expertise are positive and statistically significant, indicating that audit committee monitoring mechanisms influence the financial reporting quality of listed non-financial firms in Nigeria. Regulatory bodies in Nigeria should mandate all the three board representatives on AC to be non-executive directors, while making a combination of financial and industrial expertise replace financial literacy to further improve the quality of the financial reporting. (C) 2016 Published by Future Academy www.FutureAcademy.org.uk