IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 8 NO. 1 2022

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Effect of Audit Committee Characteristics on Auditors Efficiency of Conglomerate Firms in Nigeria

Ofor, Nkechi Theresa (Ph.D), Orjinta, Hope Ifeoma (Ph.D) & Mayah, Eunice

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Abstract

This paper examined the effect of audit committee characteristics on auditors efficiency of all conglomerate firms quoted in Nigerian Exchange Group (NGX). A sample of 5 listed firms was used for the period of ten years spanning 2011 to 2020. Auditors’ efficiency was taken as our dependent variable and was measured as a dummy variable 1 if the firm is audited by any of the BIG4 audit firms and 0 if otherwise while audit committee characteristics was taken as our independent variable proxied using audit committee independence, audit committee gender diversity, audit committee financial expertise and audit committee diligence. The study was predicated on ex post facto research design and used secondary data for the analysis. The secondary sources of data were collected from annual reports of the selected conglomerate firms and four (4) specific objectives and hypotheses were subjected to some preliminary data tests such as descriptive statistics and Variance inflation factor and was analyzed using panel regression analysis taking cognizance of hausman effects tests. The result revealed that there is a significant positive relationship between audit committee independence, audit committee financial expertise and auditors efficiency which was statistically significant at 5% levels of significance respectively while an insignificant effect was documented against audit committee diligence and auditors efficiency. Generally, the findings showed that 59% of changes in the auditors efficiency of conglomerate firms can be attributed to the audit committee characteristics while about 41% were unaccounted for hence captured by the stochastic error term. The study recommends among others, that conglomerate firms’ audit committees should be constituted by independent persons with high level of integrity that can match words with action to improve auditors efficiency and also enable them perform their oversight functions effectively and ensure that audit committee members meet fre

keywords:

Auditors efficiency, audit committee characteristics, conglomerate firms, Nigeria

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