Audit Committee Characteristics and Corporate Performance: Evidence from Listed Conglomerates in Nigeria

Abstract

The corporate governance code mandates all publicly quoted firms in Nigeria to establish an audit committee to ensure transparency in financial reporting and protect shareholders' interests. This study examined the effect of audit characteristics on the corporate performance of listed conglomerates in Nigeria from 2015 to 2021. Audit characteristics was proxy as audit committee size, audit committee meetings and audit committee independence, while corporate performance was proxy as return on asset. The secondary data were sourced from the firms' annual reports and were analysed using correlation matrix and panel fixed regression. The result from the panel regression showed that audit committee size and independence do not significantly affect the performance of listed conglomerates in Nigeria. In contrast, audit committee meetings significantly but negatively affect listed conglomerates in Nigeria. This study concludes that the frequency of audit committee meetings does not increase the performance of firms. This study recommends that the Security and Exchange Commission ensure that conglomerate firms in Nigeria comply with at least four audit committee meetings in a year to improve monitoring mechanisms and corporate performance.

Corporate governance and financial performance of oil and gas firms: The Nigerian experience

“…They also claimed that firms with smaller audit committees that have more financial expertise and experience perform better. In contrast, Onmonya and Ebire (2023) found that ACS do not affect financial performance. Additionally, it has been argued that the size of the firm has a significant effect on the financial performance of firms'.…”