Volume 24, Issue 1, August 2018, Pages 289–298
HOPE IFEOMA ORJINTA1 and IKUEZE NKEM EVELYN2
1 Department of Accountancy, Chukwuemek A Odumegwu Ojukwu University, Nigeria
2 Department of Accountancy, Chukwuemek A Odumegwu Ojukwu University, Nigeria
Original language: English
Copyright © 2018 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This paper examined the effect of audit committee characteristics on performance of selected non-financial firms quoted in Nigerian Stock Exchange. A sample of 50 listed firms was used for the period 2007 to 2016. The study was predicated on ex post facto and cross-sectional research design and used secondary data for the analysis. The data collected were analyzed using descriptive statistics, Pearson correlation analysis and Ordinary Least Square regression. The result revealed that there is a significant positive relationship between audit committee independence, audit committee meeting and firm performance at 5% level of significant while a positive significant association was also recorded against audit committee size and return on assets but at 10% level of significant while an insignificant and positive relationship was observed between audit committee qualification and return on assets of non-financial firms in Nigeria. The findings showed that 76% of changes in the performance of non-financial firms can be attributed to the audit committee characteristics while 24% were unaccounted for hence captured by the stochastic error term. The study recommends among others, that non-financial firms’ directors should be constituted by independent persons with high level of integrity that can match words with action to improve performance of non-financial firms and also enable them perform their oversight functions effectively and ensure that audit committee members meet frequently in order to tackle important issues that might hinder organizational performance more especially in this era of economic recession.
Author Keywords: Audit committee independence, audit committee size, committee meeting, financial qualification and return on asset.
HOPE IFEOMA ORJINTA1 and IKUEZE NKEM EVELYN2
1 Department of Accountancy, Chukwuemek A Odumegwu Ojukwu University, Nigeria
2 Department of Accountancy, Chukwuemek A Odumegwu Ojukwu University, Nigeria
Original language: English
Copyright © 2018 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
This paper examined the effect of audit committee characteristics on performance of selected non-financial firms quoted in Nigerian Stock Exchange. A sample of 50 listed firms was used for the period 2007 to 2016. The study was predicated on ex post facto and cross-sectional research design and used secondary data for the analysis. The data collected were analyzed using descriptive statistics, Pearson correlation analysis and Ordinary Least Square regression. The result revealed that there is a significant positive relationship between audit committee independence, audit committee meeting and firm performance at 5% level of significant while a positive significant association was also recorded against audit committee size and return on assets but at 10% level of significant while an insignificant and positive relationship was observed between audit committee qualification and return on assets of non-financial firms in Nigeria. The findings showed that 76% of changes in the performance of non-financial firms can be attributed to the audit committee characteristics while 24% were unaccounted for hence captured by the stochastic error term. The study recommends among others, that non-financial firms’ directors should be constituted by independent persons with high level of integrity that can match words with action to improve performance of non-financial firms and also enable them perform their oversight functions effectively and ensure that audit committee members meet frequently in order to tackle important issues that might hinder organizational performance more especially in this era of economic recession.
Author Keywords: Audit committee independence, audit committee size, committee meeting, financial qualification and return on asset.
How to Cite this Article
HOPE IFEOMA ORJINTA and IKUEZE NKEM EVELYN, “EFFECT OF AUDIT COMMITTEE CHARACTERISTICS ON PERFORMANCE OF NON-FINANCIAL FIRMS: EVIDENCE FROM A RECESSED ECONOMY,” International Journal of Innovation and Applied Studies, vol. 24, no. 1, pp. 289–298, August 2018.
