IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v7y2017i9p50-63.html
   My bibliography  Save this article

An Empirical Analysis on the Financial Reporting Quality of the Quoted Firms in Nigeria: Does Audit Committee Size Matter?

Author

Listed:
  • Samuel Akpovwre Eyenubo
  • Mudzamir Mohamed
  • Mohammad Ali

Abstract

This paper examined the relationship of audit committee size and financial reporting quality in Nigeria. The empirical study has performed using a sample of 189 companies and 664 year observation from the period of 2011-2015. One of the desirable features of corporate governance is to enhance financial reporting quality for facilitating efficient and effective resources allocation of economic decision making by corporate managers. Panel data regression was adopted and audit committee size was found positive and significant with financial reporting quality .Our results underscore the importance of the corporate governance recommendation as a mean of strengthening the monitoring and oversight role of audit committee plays in the financial reporting process. Finally the study offered recommendations to enhance financial reporting quality disclosure.

Suggested Citation

  • Samuel Akpovwre Eyenubo & Mudzamir Mohamed & Mohammad Ali, 2017. "An Empirical Analysis on the Financial Reporting Quality of the Quoted Firms in Nigeria: Does Audit Committee Size Matter?," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(9), pages 50-63, September.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:9:p:50-63
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/An_Empirical_Analysis_on_the_Financial_Reporting_Quality_of_the_Quoted_Firms_in_Nigeria_Does_Audit_Committee_Size_Matter.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/An_Empirical_Analysis_on_the_Financial_Reporting_Quality_of_the_Quoted_Firms_in_Nigeria_Does_Audit_Committee_Size_Matter.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Haniffa, R.M. & Cooke, T.E., 2005. "The impact of culture and governance on corporate social reporting," Journal of Accounting and Public Policy, Elsevier, vol. 24(5), pages 391-430.
    2. Mostafa Kamal Hassan, 2012. "A disclosure index to measure the extent of corporate governance reporting by UAE listed corporations," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 10(1), pages 4-33, June.
    3. Akhtaruddin, M., 2005. "Corporate mandatory disclosure practices in Bangladesh," The International Journal of Accounting, Elsevier, vol. 40(4), pages 399-422.
    4. Barbu, Elena M. & Dumontier, Pascal & Feleagă, Niculae & Feleagă, Liliana, 2014. "Mandatory Environmental Disclosures by Companies Complying with IASs/IFRSs: The Cases of France, Germany, and the UK," The International Journal of Accounting, Elsevier, vol. 49(2), pages 231-247.
    5. Dan Dhaliwal & Vic Naiker & Farshid Navissi, 2010. "The Association Between Accruals Quality and the Characteristics of Accounting Experts and Mix of Expertise on Audit Committees," Contemporary Accounting Research, John Wiley & Sons, vol. 27(3), pages 787-827, September.
    6. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    7. Lerong He & Rong Yang, 2014. "Does Industry Regulation Matter? New Evidence on Audit Committees and Earnings Management," Journal of Business Ethics, Springer, vol. 123(4), pages 573-589, September.
    8. Linck, James S. & Netter, Jeffry M. & Yang, Tina, 2008. "The determinants of board structure," Journal of Financial Economics, Elsevier, vol. 87(2), pages 308-328, February.
    9. Dulacha G. Barako & Phil Hancock & H. Y. Izan, 2006. "Factors Influencing Voluntary Corporate Disclosure by Kenyan Companies," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(2), pages 107-125, March.
    10. Badolato, Patrick G. & Donelson, Dain C. & Ege, Matthew, 2014. "Audit committee financial expertise and earnings management: The role of status," Journal of Accounting and Economics, Elsevier, vol. 58(2), pages 208-230.
    11. Ahmed, Anwer S. & Duellman, Scott, 2007. "Accounting conservatism and board of director characteristics: An empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 43(2-3), pages 411-437, July.
    12. Kenneth M. Lehn & Sukesh Patro & Mengxin Zhao, 2009. "Determinants of the Size and Composition of US Corporate Boards: 1935‐2000," Financial Management, Financial Management Association International, vol. 38(4), pages 747-780, December.
    13. Elena Barbu & Pascal Dumontier & Liliana Feleagă & Niculae Feleagă, 2014. "Mandatory environmental disclosures by companies complying with IASs/IFRSs. The cases of France, Germany and UK," Post-Print halshs-01319288, HAL.
    14. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    15. Fodio Inuwa MUSA & Foluke Omolayo OLORUNTOBA & Victor Chiedu OBA, 2014. "Examination of the relationship between audit committee characteristics and financial reporting quality of Nigerian deposit banks," EuroEconomica, Danubius University of Galati, issue 1(33), pages 57-65, May.
    16. Anderson, Ronald C. & Mansi, Sattar A. & Reeb, David M., 2004. "Board characteristics, accounting report integrity, and the cost of debt," Journal of Accounting and Economics, Elsevier, vol. 37(3), pages 315-342, September.
    17. Klein, April, 2002. "Audit committee, board of director characteristics, and earnings management," Journal of Accounting and Economics, Elsevier, vol. 33(3), pages 375-400, August.
    18. repec:dau:papers:123456789/4205 is not listed on IDEAS
    19. Chiraz Ben Ali, 2014. "Corporate Governance, Principal-Principal Agency Conflicts, and Disclosure," Working Papers 2014-125, Department of Research, Ipag Business School.
    20. Chau, Gerald K. & Gray, Sidney J., 2002. "Ownership structure and corporate voluntary disclosure in Hong Kong and Singapore," The International Journal of Accounting, Elsevier, vol. 37(2), pages 247-265.
    21. Richard Lambert & Christian Leuz & Robert E. Verrecchia, 2007. "Accounting Information, Disclosure, and the Cost of Capital," Journal of Accounting Research, Wiley Blackwell, vol. 45(2), pages 385-420, May.
    22. Barton, Jan & Waymire, Gregory, 2004. "Investor protection under unregulated financial reporting," Journal of Accounting and Economics, Elsevier, vol. 38(1), pages 65-116, December.
    23. Bushman, Robert M. & Smith, Abbie J., 2001. "Financial accounting information and corporate governance," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 237-333, December.
    24. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
    25. E. Barbu & P. Dumontier & Niculae Feleagă & Liliana Feleagă, 2014. "Mandatory Environmental Disclosures by Companies Complying with IASs/IFRSs: The Cases of France, Germany, and the UK," Post-Print halshs-01025802, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahsan Habib & Md. Borhan Uddin Bhuiyan, 2016. "Problem directors on the audit committee and financial reporting quality," Accounting and Business Research, Taylor & Francis Journals, vol. 46(2), pages 121-144, February.
    2. Hidaya Lawati & Khaled Hussainey & Roza Sagitova, 2021. "Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?," Review of Quantitative Finance and Accounting, Springer, vol. 57(2), pages 557-594, August.
    3. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, December.
    4. Armstrong, Christopher S. & Guay, Wayne R. & Weber, Joseph P., 2010. "The role of information and financial reporting in corporate governance and debt contracting," Journal of Accounting and Economics, Elsevier, vol. 50(2-3), pages 179-234, December.
    5. Ntim, Collins G., 2016. "Corporate governance, corporate health accounting, and firm value: The case of HIV/AIDS disclosures in Sub-Saharan Africa," The International Journal of Accounting, Elsevier, vol. 51(2), pages 155-216.
    6. Roshayani Arshad & Rohaya Md Nor & Nur Adura Ahmad Noruddin, 2011. "Ownership Structure And Interaction Effects Of Firm Performance On Management Commentary Disclosures," Journal of Global Management, Global Research Agency, vol. 2(2), pages 124-145, July.
    7. Luminita Enache & Antonio Parbonetti & Anup Srivastava, 2020. "Are all outside directors created equal with respect to firm disclosure policy?," Review of Quantitative Finance and Accounting, Springer, vol. 55(2), pages 541-577, August.
    8. Roshayani Arshad Author_Email: roshayani@salam.uitm.edu.my & Rohaya Md Nor & Nur Adura Ahmad Noruddin, 2011. "Ownership Structure And Interaction Effects Of Firm Performance On Management Commentary Disclosures," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-332, Conference Master Resources.
    9. Sugato Chakravarty & Chiraphol N. Chiyachantana & Christine Jiang, 2011. "THE CHOICE OF TRADING VENUE AND RELATIVE PRICE IMPACT OF INSTITUTIONAL TRADING: ADRs VERSUS THE UNDERLYING SECURITIES IN THEIR LOCAL MARKETS," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 34(4), pages 537-567, December.
    10. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    11. Dea¡¯a Al-Deen Omar Al-Sraheen & Faudziah Hanim Fadzil & Syed Soffian Bin Syed Ismail, 2014. "Does Corporate Governance Matter? Evidence from Accounting Conservatism Practices among Jordanian Listed Companies," International Journal of Learning and Development, Macrothink Institute, vol. 4(4), pages 64-80, December.
    12. Simona Alfiero & Massimo Cane & Ruggiero Doronzo & Alfredo Esposito, 2018. "Determining characteristics of boards adopting Integrated Reporting," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2018(2), pages 37-71.
    13. Nooraisah Katmon & Omar Al Farooque, 2017. "Exploring the Impact of Internal Corporate Governance on the Relation Between Disclosure Quality and Earnings Management in the UK Listed Companies," Journal of Business Ethics, Springer, vol. 142(2), pages 345-367, May.
    14. repec:csr:wpaper:1014 is not listed on IDEAS
    15. Radhakrishnan, Suresh & Tsang, Albert & Liu, Rubing, 2018. "A Corporate Social Responsibility Framework for Accounting Research," The International Journal of Accounting, Elsevier, vol. 53(4), pages 274-294.
    16. Shashank Bansal & Maria Victoria Lopez-Perez & Lazaro Rodriguez-Ariza, 2018. "Board Independence and Corporate Social Responsibility Disclosure: The Mediating Role of the Presence of Family Ownership," Administrative Sciences, MDPI, vol. 8(3), pages 1-21, July.
    17. Ali Meftah Gerged, 2021. "Factors affecting corporate environmental disclosure in emerging markets: The role of corporate governance structures," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 609-629, January.
    18. Ge, Wenxia & Kim, Jeong-Bon & Song, Byron Y., 2012. "Internal governance, legal institutions and bank loan contracting around the world," Journal of Corporate Finance, Elsevier, vol. 18(3), pages 413-432.
    19. Filippo Vitolla & Nicola Raimo & Arcangelo Marrone & Michele Rubino, 2020. "The role of board of directors in intellectual capital disclosure after the advent of integrated reporting," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2188-2200, September.
    20. Hanif Putra Ardianto & Iman Harymawan & Yuanita Intan Paramitasari & Mohammad Nasih, 2020. "Financial Reporting Quality and Investment Efficiency: Evidence from Indonesian Stock Market," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 66, pages 112-122, Desember.
    21. Houcine, Asma, 2017. "The effect of financial reporting quality on corporate investment efficiency: Evidence from the Tunisian stock market," Research in International Business and Finance, Elsevier, vol. 42(C), pages 321-337.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:7:y:2017:i:9:p:50-63. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.