Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Board Sub-Committee Effectiveness and Annual Report Readability of Non –Financial Firms in Nigeria

Mfon Unyime Etuk, Nkanikpo I. Ibok and Eno G. Ukpong

Abstract

This study examined the effect of board subcommittee and annual report readability of listed non- financial firms in Nigeria. Particularly, this study obtained data from listed non-financial firms in Nigeria from 2013 to 2022. The total population of this study was 109 non-financial firms listed in Nigeria. The study employed a longitudinal research design with a simple filtering technique to select the sample size of 72 firms. A panel regression analysis was employed to analyse data extracted from annual report. The findings of the study showed that board sub-committees’ effectiveness when measured in terms of audit committee financial expertise [coef. = -0.774 (0.012)] had a significant negative effect on the FOG index measure of annual report readability of the listed non-financial firms listed in Nigeria. Board sub-committees’ effectiveness when measured in terms of audit committee independence [coef. = -0.007 (0.480)] has an insignificant negative effect on the FOG index measure of annual report readability of the listed non-financial firms in Nigeria. The study recommends that an increase in the number of board sub-committees will have a minimal impact on the FOG index measure of annual readability, resulting in a slightly more challenging readability of the annual report for listed non-financial firms in selected Sub- Saharan African countries during the study period.

Keywords

Board Sub-CommitteeAnnual Report ReadabilityNon –Financial Firms

References

Ahmad, Z., & Maochun, Y. (2019). Readability of annual report and firm performance. Asian journal of accounting and governace,10, 123-134. Al Lawati, H., & Hussainey, K. (2021). The impact of audit committee financial expertise on corporate financial decisions. Corporate ownership and control 18(3) 348-359. Appah,E.,(2022) Corporate governance attributes and tax planning of listed pharmaceutical companies in Nigeria. British journal of management and marketing studies,5(1) 1-38. Bao, S. R, K., & Lewellyn, B. (2017). Ownership structure and earnings management in emerging markets—An Institutionalized agency perspective. International business Review 26(5):828–38. https//doi: 10.1016/J.IBUSREV.2017.02.002. Bajra, U., & Cadez, S. (2018). Audit committees and financial reporting quality: The 8th EU company law directives perspective. Economic systems, 42(1) 151-163. Beasley, M. S. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review, 443-465. Blanco, B., Coram, P., Dhole, S., & Kent, P. (2020). How do auditors respond to low annual report readability? Journal of Accounting and Public Policy, 40(3), 106-119. Chairunesia, W., & Bintara, R. (2019). The effect of good corporate governance and financial distress on earnings management in Indonesian and Malaysia companies entered in Asian Corporate Governance Scorecard. International journal of academic research in accounting, finance and management sciences, 9(2), 224-236. Chalaki, P., Didar, H., & Riahinezhad, M. (2012). Corporate governance attributes and financial reporting quality: Empirical evidence from Iran. International journal of business and social science, 3(15) 103-134. Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management review, 22(1), 20-47. Donalson , L. & Davis , J. (1991). Stewardship theory or Agency theory: CEO governance and shareholders returns. Australian journal of management, 49-65. Efretuei,W., (2015). Narrative disclosure in corporate annual reports. A syntactical complexity perspective. The university of leeds,2(1)107-114. Etuk, M.U., & Akpan, D.C.,(2023) Corporate governance mechanisms and annual report readability of listed oil and gas firms in Nigeria. Research journal of management practice 3 (1) 91-106. Ezat, W.S., (2019). The impact of corporate governance structure on firm performance management. Auditing journal ,34(6),741-759. Gaur, S. S., Bathula, H., & Singh, D. (2015). Ownership concentration, board characteristics and firm performance. Management Decision. 224-253. Hasan, M. M . & Habib .A., (2023) . Readability of narrative disclosure and corporate liquidity and payout policies. International review of financial analysis I (3) 24-38. Kiel, G. C., & Nicholson, G. J. (2003). Board composition and corporate performance: How the Australian experience informs contrasting theories of corporate governance. Corporate governance: an international review, 11(3), 189-205. Köhler, A., Ratzinger-Sakel, N., & Theis, J. (2020). The effects of key audit matters on the auditor’s report’s communicative value: Experimental evidence from investment professionals and non-professional investors. Journal of accounting, 17(2), 105-128. Lennox, C. S., & Kausar, A. (2017). Estimation risk and auditor conservatism. Review of accounting Studies, 22(1), 185-216. Mohammadi, S., & Naghsbandi, N., (2019). Audit committee attributes and readability of financial statement. Iranian journal of accounting auditing and finance,9(4),89-94. Muth, M., & Donaldson, L. (1998). Stewardship theory and board structure: A contingency approach. Corporate Governance: An International review, 6(1), 5-28. Nicholson, G. J., & Kiel, G. C. (2007). Can directors impact performance? A case based test of three theories of corporate governance. Corporate Governance: An International Review, 15(4), 585-608. Peter, Z., Hamid, T .K.& Ibrahim, M. (2020) . Board attributes and tax planning of listed non- financial companies in Nigeria. International journal of accounting and finance , 9(1) 130- Rama ,S.V(2020) Corporate board subcommittees and firm performance evidence from India. International conference on economics and finance 36,187-200. Rifat,F., Hossain,M .M ,Ghosh, R.(2022) .Board characteristics audit committee attributes and firm performance empirical evidence from emerging economy. Asian journal of Accounting research 7(1) 84-96. Udo,E. S., Ukpe, I J., Emenyi .E O.(2023) Board committees’ Independence and financial performance of listed non firms in Nigeria . European journal of accounting auditing and finance research 11(7) 47-76. Velte, P. (2018a) .The impact of audit committee independence expertise and meeting on perceived quality . Evidence from Germany, Journal of international accounting, auditing and taxation 30,46-59. Velte, P.(2018b).Do women in the audit committee affect audit fees? Evidence from Germany. International journal of auditing 22(2) 118-129. Xua, Q., Fernando,G.O.,& Tam, O.K.,(2018) Board gender diversity and corporate social responsibility . Journal of business ethics 149 (4) 731-746.

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT

Bridging Legal, Financial, and Data Governance in Enterprise AI: Emerging Trends

Author: Funmilayo Ashore-Onisemo, Ebehiremen Faith Iziduh, Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey Okwesa

Macroeconomic Policies and Economic Stability in Nigeria

Author: Abel-Tariah Emmanuel Onate, Okon, Ekanem Nsikhe, Nwenyi Francis Onwe

Determinants of Bank Liquidity in Nigeria

Author: Nelson Johnny Ebifemo-ere Stephen