AUDIT COMMITTEE AND EARNINGS MANAGEMENT OF LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA
Keywords:
Audit Committee size, Audit Financial Expertise, Earnings ManagementAbstract
The study examined the effect of audit committee on earnings management of quoted industrial goods firms in Nigeria from 2012-2022 using a sample of eleven (11) industrial goods firms. Ex-Post Facto research design was employed while secondary data were collected and subjected to Panel Least Square Regression Analysis and Pearson Correlation Analysis in order to achieve the study objectives. Audit committee, which is the independent variable, was measured using audit committee size and audit financial expertise; whereas, earnings management which is the dependent variable was measured using discretionary accruals. Results of this study revealed that audit committee size and audit committee independence have a significant positive effect on discretionary accruals at 5% level of significance. This study recommended among others that there is the need for regulators like Securities and Exchange Commission (SEC) to increase the minimum number of members with financial expertise in the audit committees, since audit financial expertise plays significant role in checkmating the financial reports provided by managers and in reducing the occurrence of earnings management.
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